Correlation Between Lion Biotechnologies and VIRG NATL
Can any of the company-specific risk be diversified away by investing in both Lion Biotechnologies and VIRG NATL 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 Lion Biotechnologies and VIRG NATL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion Biotechnologies and VIRG NATL BANKSH, you can compare the effects of market volatilities on Lion Biotechnologies and VIRG NATL 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 Lion Biotechnologies with a short position of VIRG NATL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Biotechnologies and VIRG NATL.
Diversification Opportunities for Lion Biotechnologies and VIRG NATL
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lion and VIRG is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Lion Biotechnologies and VIRG NATL BANKSH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIRG NATL BANKSH and Lion Biotechnologies 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 Lion Biotechnologies are associated (or correlated) with VIRG NATL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIRG NATL BANKSH has no effect on the direction of Lion Biotechnologies i.e., Lion Biotechnologies and VIRG NATL go up and down completely randomly.
Pair Corralation between Lion Biotechnologies and VIRG NATL
Assuming the 90 days trading horizon Lion Biotechnologies is expected to generate 1.89 times more return on investment than VIRG NATL. However, Lion Biotechnologies is 1.89 times more volatile than VIRG NATL BANKSH. It trades about 0.05 of its potential returns per unit of risk. VIRG NATL BANKSH is currently generating about 0.1 per unit of risk. If you would invest 735.00 in Lion Biotechnologies on September 3, 2024 and sell it today you would earn a total of 165.00 from holding Lion Biotechnologies or generate 22.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion Biotechnologies vs. VIRG NATL BANKSH
Performance |
| Timeline |
| Lion Biotechnologies |
| VIRG NATL BANKSH |
Lion Biotechnologies and VIRG NATL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion Biotechnologies and VIRG NATL
The main advantage of trading using opposite Lion Biotechnologies and VIRG NATL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Biotechnologies position performs unexpectedly, VIRG NATL 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 VIRG NATL will offset losses from the drop in VIRG NATL's long position.| Lion Biotechnologies vs. Apple Inc | Lion Biotechnologies vs. Apple Inc | Lion Biotechnologies vs. Apple Inc | Lion Biotechnologies vs. Apple Inc |
| VIRG NATL vs. Corporate Office Properties | VIRG NATL vs. WillScot Mobile Mini | VIRG NATL vs. Lion Biotechnologies | VIRG NATL vs. T MOBILE INCDL 00001 |
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 the Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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