Correlation Between Ocular Therapeutix and Achilles Therapeutics

Can any of the company-specific risk be diversified away by investing in both Ocular Therapeutix and Achilles Therapeutics at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ocular Therapeutix and Achilles Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ocular Therapeutix and Achilles Therapeutics PLC, you can compare the effects of market volatilities on Ocular Therapeutix and Achilles Therapeutics and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ocular Therapeutix with a short position of Achilles Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ocular Therapeutix and Achilles Therapeutics.

Diversification Opportunities for Ocular Therapeutix and Achilles Therapeutics

0.21

Correlation Coefficient

Ocular Therapeutix  Achilles Therapeutics

Modest diversification

The 3 months correlation between Ocular and Achilles is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Ocular Therapeutix and Achilles Therapeutics PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Achilles Therapeutics PLC and Ocular Therapeutix is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ocular Therapeutix are associated (or correlated) with Achilles Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Achilles Therapeutics PLC has no effect on the direction of Ocular Therapeutix i.e., Ocular Therapeutix and Achilles Therapeutics go up and down completely randomly.

Pair Corralation between Ocular Therapeutix and Achilles Therapeutics

Given the investment horizon of 90 days Ocular Therapeutix is expected to generate 2.59 times more return on investment than Achilles Therapeutics. However, Ocular Therapeutix is 2.59 times more volatile than Achilles Therapeutics PLC. It trades about 0.05 of its potential returns per unit of risk. Achilles Therapeutics PLC is currently generating about -0.18 per unit of risk. If you would invest  869.00  in Ocular Therapeutix on September 17, 2024 and sell it today you would earn a total of  24.00  from holding Ocular Therapeutix or generate 2.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Ocular Therapeutix  vs.  Achilles Therapeutics PLC

Ocular Therapeutix

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ocular Therapeutix are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Ocular Therapeutix is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Achilles Therapeutics PLC

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Achilles Therapeutics PLC are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent technical indicators, Achilles Therapeutics disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ocular Therapeutix and Achilles Therapeutics

The main advantage of trading using opposite Ocular Therapeutix and Achilles Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ocular Therapeutix position performs unexpectedly, Achilles Therapeutics can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Achilles Therapeutics will offset losses from the drop in Achilles Therapeutics' long position.

The idea behind Ocular Therapeutix and Achilles Therapeutics PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.