Correlation Between Acumen Pharmaceuticals and Perrigo Company

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

By analyzing existing cross correlation between Acumen Pharmaceuticals and Perrigo Company PLC, you can compare the effects of market volatilities on Acumen Pharmaceuticals and Perrigo Company 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 Perrigo Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acumen Pharmaceuticals and Perrigo Company.

Diversification Opportunities for Acumen Pharmaceuticals and Perrigo Company

0.03

Correlation Coefficient

Acumen Pharmaceuticals  Perrigo Company

Significant diversification

The 3 months correlation between Acumen and Perrigo is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Acumen Pharmaceuticals and Perrigo Company PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perrigo Company 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 Perrigo Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perrigo Company has no effect on the direction of Acumen Pharmaceuticals i.e., Acumen Pharmaceuticals and Perrigo Company go up and down completely randomly.

Pair Corralation between Acumen Pharmaceuticals and Perrigo Company

Given the investment horizon of 90 days Acumen Pharmaceuticals is expected to under-perform the Perrigo Company. In addition to that, Acumen Pharmaceuticals is 1.53 times more volatile than Perrigo Company PLC. It trades about -0.07 of its total potential returns per unit of risk. Perrigo Company PLC is currently generating about 0.07 per unit of volatility. If you would invest  2,390  in Perrigo Company PLC on February 18, 2025 and sell it today you would earn a total of  315.00  from holding Perrigo Company PLC or generate 13.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Acumen Pharmaceuticals  vs.  Perrigo Company PLC

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 June 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Perrigo Company

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Perrigo Company PLC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent technical and fundamental indicators, Perrigo Company displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Acumen Pharmaceuticals and Perrigo Company

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

The idea behind Acumen Pharmaceuticals and Perrigo Company PLC 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.