Correlation Between Block and Acerus Pharmaceuticals

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

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

Diversification Opportunities for Block and Acerus Pharmaceuticals

-0.75

Correlation Coefficient

Block  Acerus Pharmaceuticals

Pay attention - limited upside

The 3 months correlation between Block and Acerus is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Block Inc and Acerus Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acerus Pharmaceuticals and Block 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 Block Inc are associated (or correlated) with Acerus Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acerus Pharmaceuticals has no effect on the direction of Block i.e., Block and Acerus Pharmaceuticals go up and down completely randomly.

Pair Corralation between Block and Acerus Pharmaceuticals

If you would invest  22.00  in Acerus Pharmaceuticals on January 25, 2024 and sell it today you would earn a total of  0.00  from holding Acerus Pharmaceuticals or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	4.55%
Values	Daily Returns

Block Inc  vs.  Acerus Pharmaceuticals

Block Inc

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Block Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Block reported solid returns over the last few months and may actually be approaching a breakup point.

Acerus Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Block and Acerus Pharmaceuticals

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

The idea behind Block Inc and Acerus Pharmaceuticals 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.