Correlation Between Acumen Pharmaceuticals and OptiNose

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

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

Diversification Opportunities for Acumen Pharmaceuticals and OptiNose

0.42

Correlation Coefficient

Acumen Pharmaceuticals  OptiNose

Very weak diversification

The 3 months correlation between Acumen and OptiNose is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Acumen Pharmaceuticals and OptiNose in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OptiNose and Acumen Pharmaceuticals 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 Acumen Pharmaceuticals are associated (or correlated) with OptiNose. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OptiNose has no effect on the direction of Acumen Pharmaceuticals i.e., Acumen Pharmaceuticals and OptiNose go up and down completely randomly.

Pair Corralation between Acumen Pharmaceuticals and OptiNose

Given the investment horizon of 90 days Acumen Pharmaceuticals is expected to generate 0.7 times more return on investment than OptiNose. However, Acumen Pharmaceuticals is 1.44 times less risky than OptiNose. It trades about -0.02 of its potential returns per unit of risk. OptiNose is currently generating about -0.12 per unit of risk. If you would invest  245.00  in Acumen Pharmaceuticals on September 12, 2024 and sell it today you would lose (28.00) from holding Acumen Pharmaceuticals or give up 11.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Acumen Pharmaceuticals  vs.  OptiNose

Acumen Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acumen Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Acumen Pharmaceuticals is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

OptiNose

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OptiNose has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Acumen Pharmaceuticals and OptiNose

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

The idea behind Acumen Pharmaceuticals and OptiNose 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.