Correlation Between Definitive Healthcare and Acumen Pharmaceuticals

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

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

Diversification Opportunities for Definitive Healthcare and Acumen Pharmaceuticals

0.72

Correlation Coefficient

Definitive Healthcare  Acumen Pharmaceuticals

Poor diversification

The 3 months correlation between Definitive and Acumen is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Definitive Healthcare Corp and Acumen Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acumen Pharmaceuticals and Definitive Healthcare 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 Definitive Healthcare Corp are associated (or correlated) with Acumen Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acumen Pharmaceuticals has no effect on the direction of Definitive Healthcare i.e., Definitive Healthcare and Acumen Pharmaceuticals go up and down completely randomly.

Pair Corralation between Definitive Healthcare and Acumen Pharmaceuticals

Allowing for the 90-day total investment horizon Definitive Healthcare is expected to generate 1.88 times less return on investment than Acumen Pharmaceuticals. But when comparing it to its historical volatility, Definitive Healthcare Corp is 1.45 times less risky than Acumen Pharmaceuticals. It trades about 0.09 of its potential returns per unit of risk. Acumen Pharmaceuticals is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  107.00  in Acumen Pharmaceuticals on May 16, 2025 and sell it today you would earn a total of  33.00  from holding Acumen Pharmaceuticals or generate 30.84% return on investment over 90 days.

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

Definitive Healthcare Corp  vs.  Acumen Pharmaceuticals

Definitive Healthcare

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Definitive Healthcare Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady technical indicators, Definitive Healthcare demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Acumen Pharmaceuticals

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Acumen Pharmaceuticals are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Acumen Pharmaceuticals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Definitive Healthcare and Acumen Pharmaceuticals

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

The idea behind Definitive Healthcare Corp and Acumen 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..