Correlation Between Acumen Pharmaceuticals and Agilent Technologies

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

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

Diversification Opportunities for Acumen Pharmaceuticals and Agilent Technologies

0.95

Correlation Coefficient

Acumen Pharmaceuticals  Agilent Technologies

Almost no diversification

The 3 months correlation between Acumen and Agilent is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Acumen Pharmaceuticals and Agilent Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilent Technologies and Acumen 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 Acumen Pharmaceuticals are associated (or correlated) with Agilent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agilent Technologies has no effect on the direction of Acumen Pharmaceuticals i.e., Acumen Pharmaceuticals and Agilent Technologies go up and down completely randomly.

Pair Corralation between Acumen Pharmaceuticals and Agilent Technologies

Given the investment horizon of 90 days Acumen Pharmaceuticals is expected to generate 2.12 times more return on investment than Agilent Technologies. However, Acumen Pharmaceuticals is 2.12 times more volatile than Agilent Technologies. It trades about -0.1 of its potential returns per unit of risk. Agilent Technologies is currently generating about -0.22 per unit of risk. If you would invest  162.00  in Acumen Pharmaceuticals on January 26, 2025 and sell it today you would lose (52.00) from holding Acumen Pharmaceuticals or give up 32.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Acumen Pharmaceuticals  vs.  Agilent Technologies

Acumen Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Acumen Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in May 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Agilent Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Agilent Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Acumen Pharmaceuticals and Agilent Technologies

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

The idea behind Acumen Pharmaceuticals and Agilent Technologies 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.