Correlation Between Sunshine Biopharma and Acorda Therapeutics

Can any of the company-specific risk be diversified away by investing in both Sunshine Biopharma and Acorda 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 Sunshine Biopharma and Acorda Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sunshine Biopharma and Acorda Therapeutics, you can compare the effects of market volatilities on Sunshine Biopharma and Acorda 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 Sunshine Biopharma with a short position of Acorda Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunshine Biopharma and Acorda Therapeutics.

Diversification Opportunities for Sunshine Biopharma and Acorda Therapeutics

0.01

Correlation Coefficient

Sunshine Biopharma  Acorda Therapeutics

Significant diversification

The 3 months correlation between Sunshine and Acorda is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Sunshine Biopharma and Acorda Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acorda Therapeutics and Sunshine Biopharma 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 Sunshine Biopharma are associated (or correlated) with Acorda Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acorda Therapeutics has no effect on the direction of Sunshine Biopharma i.e., Sunshine Biopharma and Acorda Therapeutics go up and down completely randomly.

Pair Corralation between Sunshine Biopharma and Acorda Therapeutics

If you would invest  257.00  in Sunshine Biopharma on September 15, 2024 and sell it today you would earn a total of  18.00  from holding Sunshine Biopharma or generate 7.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Sunshine Biopharma  vs.  Acorda Therapeutics

Sunshine Biopharma

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sunshine Biopharma are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Sunshine Biopharma may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Acorda Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acorda Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Acorda Therapeutics is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Sunshine Biopharma and Acorda Therapeutics

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

The idea behind Sunshine Biopharma and Acorda Therapeutics 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.