Correlation Between Cumberland Pharmaceuticals and Atreca

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

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

Diversification Opportunities for Cumberland Pharmaceuticals and Atreca

0.36

Correlation Coefficient

Cumberland Pharmaceuticals  Atreca

Weak diversification

The 3 months correlation between Cumberland and Atreca is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Cumberland Pharmaceuticals and Atreca Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atreca Inc and Cumberland 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 Cumberland Pharmaceuticals are associated (or correlated) with Atreca. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atreca Inc has no effect on the direction of Cumberland Pharmaceuticals i.e., Cumberland Pharmaceuticals and Atreca go up and down completely randomly.

Pair Corralation between Cumberland Pharmaceuticals and Atreca

Given the investment horizon of 90 days Cumberland Pharmaceuticals is expected to generate 0.31 times more return on investment than Atreca. However, Cumberland Pharmaceuticals is 3.28 times less risky than Atreca. It trades about 0.02 of its potential returns per unit of risk. Atreca Inc is currently generating about -0.04 per unit of risk. If you would invest  163.00  in Cumberland Pharmaceuticals on January 19, 2024 and sell it today you would earn a total of  2.00  from holding Cumberland Pharmaceuticals or generate 1.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	92.95%
Values	Daily Returns

Cumberland Pharmaceuticals  vs.  Atreca Inc

Cumberland Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cumberland Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Atreca Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atreca Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in May 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Cumberland Pharmaceuticals and Atreca

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

The idea behind Cumberland Pharmaceuticals and Atreca Inc 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.