Correlation Between Pulmatrix and Arcadia Biosciences

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

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

Diversification Opportunities for Pulmatrix and Arcadia Biosciences

0.11

Correlation Coefficient

Pulmatrix  Arcadia Biosciences

Average diversification

The 3 months correlation between Pulmatrix and Arcadia is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Pulmatrix and Arcadia Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcadia Biosciences and Pulmatrix 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 Pulmatrix are associated (or correlated) with Arcadia Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcadia Biosciences has no effect on the direction of Pulmatrix i.e., Pulmatrix and Arcadia Biosciences go up and down completely randomly.

Pair Corralation between Pulmatrix and Arcadia Biosciences

Given the investment horizon of 90 days Pulmatrix is expected to under-perform the Arcadia Biosciences. But the stock apears to be less risky and, when comparing its historical volatility, Pulmatrix is 2.68 times less risky than Arcadia Biosciences. The stock trades about -0.03 of its potential returns per unit of risk. The Arcadia Biosciences is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  445.00  in Arcadia Biosciences on August 5, 2025 and sell it today you would lose (84.00) from holding Arcadia Biosciences or give up 18.88% of portfolio value over 90 days.

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

Pulmatrix  vs.  Arcadia Biosciences

Pulmatrix

Risk-Adjusted Performance

Weakest

Over the last 90 days Pulmatrix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Arcadia Biosciences

Risk-Adjusted Performance

Weakest

Over the last 90 days Arcadia Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Arcadia Biosciences is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pulmatrix and Arcadia Biosciences

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

The idea behind Pulmatrix and Arcadia Biosciences 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.