Correlation Between Roku and ACRX Old
Can any of the company-specific risk be diversified away by investing in both Roku and ACRX Old 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 Roku and ACRX Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roku Inc and ACRX Old, you can compare the effects of market volatilities on Roku and ACRX Old 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 Roku with a short position of ACRX Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roku and ACRX Old.
Diversification Opportunities for Roku and ACRX Old
Pay attention - limited upside
The 3 months correlation between Roku and ACRX is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Roku Inc and ACRX Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACRX Old and Roku 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 Roku Inc are associated (or correlated) with ACRX Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACRX Old has no effect on the direction of Roku i.e., Roku and ACRX Old go up and down completely randomly.
Pair Corralation between Roku and ACRX Old
Given the investment horizon of 90 days Roku Inc is expected to generate 0.66 times more return on investment than ACRX Old. However, Roku Inc is 1.5 times less risky than ACRX Old. It trades about 0.0 of its potential returns per unit of risk. ACRX Old is currently generating about 0.0 per unit of risk. If you would invest 10,245 in Roku Inc on January 25, 2024 and sell it today you would lose (4,071) from holding Roku Inc or give up 39.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.33% |
| Values | Daily Returns |
Roku Inc vs. ACRX Old
Performance |
| Timeline |
| Roku Inc |
| ACRX Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Roku and ACRX Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roku and ACRX Old
The main advantage of trading using opposite Roku and ACRX Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roku position performs unexpectedly, ACRX Old 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 ACRX Old will offset losses from the drop in ACRX Old's long position.The idea behind Roku Inc and ACRX Old 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.| ACRX Old vs. Lifecore Biomedical | ACRX Old vs. Lucy Scientific Discovery | ACRX Old vs. Alimera Sciences | ACRX Old vs. Shuttle Pharmaceuticals |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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