Correlation Between Exagen and Aclaris Therapeutics

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

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

Diversification Opportunities for Exagen and Aclaris Therapeutics

0.26

Correlation Coefficient

Exagen  Aclaris Therapeutics

Modest diversification

The 3 months correlation between Exagen and Aclaris is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Exagen Inc and Aclaris Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aclaris Therapeutics and Exagen 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 Exagen Inc are associated (or correlated) with Aclaris Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aclaris Therapeutics has no effect on the direction of Exagen i.e., Exagen and Aclaris Therapeutics go up and down completely randomly.

Pair Corralation between Exagen and Aclaris Therapeutics

Considering the 90-day investment horizon Exagen Inc is expected to generate 2.71 times more return on investment than Aclaris Therapeutics. However, Exagen is 2.71 times more volatile than Aclaris Therapeutics. It trades about 0.02 of its potential returns per unit of risk. Aclaris Therapeutics is currently generating about -0.22 per unit of risk. If you would invest  428.00  in Exagen Inc on December 29, 2024 and sell it today you would lose (44.00) from holding Exagen Inc or give up 10.28% of portfolio value over 90 days.

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

Exagen Inc  vs.  Aclaris Therapeutics

Exagen Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Exagen Inc 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, Exagen may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Aclaris Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aclaris Therapeutics 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 April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Exagen and Aclaris Therapeutics

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

The idea behind Exagen Inc and Aclaris 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.