Correlation Between Acasti Pharma and Tonix Pharmaceuticals

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

By analyzing existing cross correlation between Acasti Pharma and Tonix Pharmaceuticals Holding, you can compare the effects of market volatilities on Acasti Pharma and Tonix Pharmaceuticals 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 Acasti Pharma with a short position of Tonix Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acasti Pharma and Tonix Pharmaceuticals.

Diversification Opportunities for Acasti Pharma and Tonix Pharmaceuticals

0.41

Correlation Coefficient

Acasti Pharma  Tonix Pharmaceuticals

Very weak diversification

The 3 months correlation between Acasti and Tonix is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Acasti Pharma and Tonix Pharmaceuticals Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tonix Pharmaceuticals and Acasti Pharma 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 Acasti Pharma are associated (or correlated) with Tonix Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tonix Pharmaceuticals has no effect on the direction of Acasti Pharma i.e., Acasti Pharma and Tonix Pharmaceuticals go up and down completely randomly.

Pair Corralation between Acasti Pharma and Tonix Pharmaceuticals

Given the investment horizon of 90 days Acasti Pharma is expected to generate 0.64 times more return on investment than Tonix Pharmaceuticals. However, Acasti Pharma is 1.57 times less risky than Tonix Pharmaceuticals. It trades about -0.01 of its potential returns per unit of risk. Tonix Pharmaceuticals Holding is currently generating about -0.09 per unit of risk. If you would invest  588.00  in Acasti Pharma on February 17, 2024 and sell it today you would lose (312.00) from holding Acasti Pharma or give up 53.06% of portfolio value over 90 days.

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

Acasti Pharma  vs.  Tonix Pharmaceuticals Holding

Acasti Pharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acasti Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Tonix Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tonix Pharmaceuticals Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in June 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Acasti Pharma and Tonix Pharmaceuticals

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

The idea behind Acasti Pharma and Tonix Pharmaceuticals Holding 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.