Correlation Between Pinduoduo and Acacia Pharma

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

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

Diversification Opportunities for Pinduoduo and Acacia Pharma

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Correlation Coefficient

Pinduoduo  Acacia Pharma

Pay attention - limited upside

The 3 months correlation between Pinduoduo and Acacia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Pinduoduo and Acacia Pharma Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acacia Pharma Group and Pinduoduo 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 Pinduoduo are associated (or correlated) with Acacia Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acacia Pharma Group has no effect on the direction of Pinduoduo i.e., Pinduoduo and Acacia Pharma go up and down completely randomly.

Pair Corralation between Pinduoduo and Acacia Pharma

If you would invest  11,916  in Pinduoduo on January 31, 2024 and sell it today you would earn a total of  602.00  from holding Pinduoduo or generate 5.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Pinduoduo  vs.  Acacia Pharma Group

Pinduoduo

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pinduoduo are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Pinduoduo is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Acacia Pharma Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acacia Pharma Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Acacia Pharma is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Pinduoduo and Acacia Pharma

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

The idea behind Pinduoduo and Acacia Pharma Group 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.