Correlation Between Pharming Group and Accustem Sciences

Can any of the company-specific risk be diversified away by investing in both Pharming Group and Accustem Sciences 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 Pharming Group and Accustem Sciences into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pharming Group NV and Accustem Sciences, you can compare the effects of market volatilities on Pharming Group and Accustem Sciences 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 Pharming Group with a short position of Accustem Sciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pharming Group and Accustem Sciences.

Diversification Opportunities for Pharming Group and Accustem Sciences

-0.23

Correlation Coefficient

Pharming Group  Accustem Sciences

Very good diversification

The 3 months correlation between Pharming and Accustem is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Pharming Group NV and Accustem Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accustem Sciences and Pharming Group 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 Pharming Group NV are associated (or correlated) with Accustem Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accustem Sciences has no effect on the direction of Pharming Group i.e., Pharming Group and Accustem Sciences go up and down completely randomly.

Pair Corralation between Pharming Group and Accustem Sciences

Assuming the 90 days horizon Pharming Group NV is expected to under-perform the Accustem Sciences. But the pink sheet apears to be less risky and, when comparing its historical volatility, Pharming Group NV is 6.05 times less risky than Accustem Sciences. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Accustem Sciences is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  28.00  in Accustem Sciences on September 24, 2024 and sell it today you would lose (4.00) from holding Accustem Sciences or give up 14.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.4%
Values	Daily Returns

Pharming Group NV  vs.  Accustem Sciences

Pharming Group NV

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pharming Group NV are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Pharming Group may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Accustem Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Accustem Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Pharming Group and Accustem Sciences

The main advantage of trading using opposite Pharming Group and Accustem Sciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pharming Group position performs unexpectedly, Accustem Sciences 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 Accustem Sciences will offset losses from the drop in Accustem Sciences' long position.

The idea behind Pharming Group NV and Accustem Sciences 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.

Check out your portfolio center.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.