Correlation Between Acurx Pharmaceuticals and Bellus Health

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

Diversification Opportunities for Acurx Pharmaceuticals and Bellus Health

0.77
  Correlation Coefficient

Poor diversification

The 1 month correlation between Acurx and Bellus is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Acurx Pharmaceuticals and Bellus Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bellus Health and Acurx 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 Acurx Pharmaceuticals are associated (or correlated) with Bellus Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bellus Health has no effect on the direction of Acurx Pharmaceuticals i.e., Acurx Pharmaceuticals and Bellus Health go up and down completely randomly.

Pair Corralation between Acurx Pharmaceuticals and Bellus Health

Given the investment horizon of 90 days Acurx Pharmaceuticals is expected to under-perform the Bellus Health. In addition to that, Acurx Pharmaceuticals is 1.51 times more volatile than Bellus Health. It trades about -0.12 of its total potential returns per unit of risk. Bellus Health is currently generating about -0.11 per unit of volatility. If you would invest  1,200  in Bellus Health on July 8, 2022 and sell it today you would lose (185.00)  from holding Bellus Health or give up 15.42% of portfolio value over 90 days.
Time Period1 Month [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Acurx Pharmaceuticals  vs.  Bellus Health

 Performance (%) 
       Timeline  
Acurx Pharmaceuticals 
Acurx Performance
0 of 100
Over the last 90 days Acurx Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in November 2022. The recent disarray may also be a sign of long period up-swing for the firm insiders.

Acurx Price Channel

Bellus Health 
Bellus Performance
0 of 100
Over the last 90 days Bellus Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in November 2022. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Bellus Price Channel

Acurx Pharmaceuticals and Bellus Health Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Acurx Pharmaceuticals and Bellus Health

The main advantage of trading using opposite Acurx Pharmaceuticals and Bellus Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acurx Pharmaceuticals position performs unexpectedly, Bellus Health 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 Bellus Health will offset losses from the drop in Bellus Health's long position.
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The idea behind Acurx Pharmaceuticals and Bellus Health 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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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

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