Correlation Between Verizon Communications and Acceleron Pharma

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

Diversification Opportunities for Verizon Communications and Acceleron Pharma

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Verizon Communications and Acceleron Pharma

If you would invest  4,010  in Verizon Communications on December 30, 2023 and sell it today you would earn a total of  186.00  from holding Verizon Communications or generate 4.64% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Verizon Communications  vs.  Acceleron Pharma

 Performance 
       Timeline  
Verizon Communications 

Risk-Adjusted Performance

9 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Verizon Communications are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Verizon Communications may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Acceleron Pharma 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Acceleron Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Acceleron Pharma is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Verizon Communications and Acceleron Pharma Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Verizon Communications and Acceleron Pharma

The main advantage of trading using opposite Verizon Communications and Acceleron Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Verizon Communications position performs unexpectedly, Acceleron 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 Acceleron Pharma will offset losses from the drop in Acceleron Pharma's long position.
The idea behind Verizon Communications and Acceleron Pharma 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.
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 CEOs Directory module to screen CEOs from public companies around the world.

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