Correlation Between Aclaris Therapeutics and Abeona Therapeutics

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Can any of the company-specific risk be diversified away by investing in both Aclaris Therapeutics and Abeona 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 Aclaris Therapeutics and Abeona Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aclaris Therapeutics and Abeona Therapeutics, you can compare the effects of market volatilities on Aclaris Therapeutics and Abeona 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 Aclaris Therapeutics with a short position of Abeona Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aclaris Therapeutics and Abeona Therapeutics.

Diversification Opportunities for Aclaris Therapeutics and Abeona Therapeutics

0.45
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Aclaris and Abeona is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Aclaris Therapeutics and Abeona Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abeona Therapeutics and Aclaris Therapeutics 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 Aclaris Therapeutics are associated (or correlated) with Abeona Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abeona Therapeutics has no effect on the direction of Aclaris Therapeutics i.e., Aclaris Therapeutics and Abeona Therapeutics go up and down completely randomly.

Pair Corralation between Aclaris Therapeutics and Abeona Therapeutics

Given the investment horizon of 90 days Aclaris Therapeutics is expected to generate 0.79 times more return on investment than Abeona Therapeutics. However, Aclaris Therapeutics is 1.26 times less risky than Abeona Therapeutics. It trades about 0.05 of its potential returns per unit of risk. Abeona Therapeutics is currently generating about 0.02 per unit of risk. If you would invest  120.00  in Aclaris Therapeutics on December 29, 2023 and sell it today you would earn a total of  4.00  from holding Aclaris Therapeutics or generate 3.33% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Aclaris Therapeutics  vs.  Abeona Therapeutics

 Performance 
       Timeline  
Aclaris Therapeutics 

Risk-Adjusted Performance

5 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Aclaris Therapeutics are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Aclaris Therapeutics unveiled solid returns over the last few months and may actually be approaching a breakup point.
Abeona Therapeutics 

Risk-Adjusted Performance

10 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Abeona Therapeutics are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal technical and fundamental indicators, Abeona Therapeutics displayed solid returns over the last few months and may actually be approaching a breakup point.

Aclaris Therapeutics and Abeona Therapeutics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Aclaris Therapeutics and Abeona Therapeutics

The main advantage of trading using opposite Aclaris Therapeutics and Abeona Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aclaris Therapeutics position performs unexpectedly, Abeona 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 Abeona Therapeutics will offset losses from the drop in Abeona Therapeutics' long position.
The idea behind Aclaris Therapeutics and Abeona 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 Commodity Directory module to find actively traded commodities issued by global exchanges.

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