Correlation Between Adimmune Corp and Lotus Pharmaceutical
Can any of the company-specific risk be diversified away by investing in both Adimmune Corp and Lotus Pharmaceutical 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 Adimmune Corp and Lotus Pharmaceutical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adimmune Corp and Lotus Pharmaceutical Co, you can compare the effects of market volatilities on Adimmune Corp and Lotus Pharmaceutical 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 Adimmune Corp with a short position of Lotus Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adimmune Corp and Lotus Pharmaceutical.
Diversification Opportunities for Adimmune Corp and Lotus Pharmaceutical
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Adimmune and Lotus is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Adimmune Corp and Lotus Pharmaceutical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus Pharmaceutical and Adimmune Corp 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 Adimmune Corp are associated (or correlated) with Lotus Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus Pharmaceutical has no effect on the direction of Adimmune Corp i.e., Adimmune Corp and Lotus Pharmaceutical go up and down completely randomly.
Pair Corralation between Adimmune Corp and Lotus Pharmaceutical
Assuming the 90 days trading horizon Adimmune Corp is expected to under-perform the Lotus Pharmaceutical. But the stock apears to be less risky and, when comparing its historical volatility, Adimmune Corp is 1.75 times less risky than Lotus Pharmaceutical. The stock trades about -0.42 of its potential returns per unit of risk. The Lotus Pharmaceutical Co is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 25,400 in Lotus Pharmaceutical Co on August 30, 2024 and sell it today you would earn a total of 2,550 from holding Lotus Pharmaceutical Co or generate 10.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adimmune Corp vs. Lotus Pharmaceutical Co
Performance |
| Timeline |
| Adimmune Corp |
| Lotus Pharmaceutical |
Adimmune Corp and Lotus Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adimmune Corp and Lotus Pharmaceutical
The main advantage of trading using opposite Adimmune Corp and Lotus Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adimmune Corp position performs unexpectedly, Lotus Pharmaceutical 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 Lotus Pharmaceutical will offset losses from the drop in Lotus Pharmaceutical's long position.| Adimmune Corp vs. Medigen Vaccine Biologics | Adimmune Corp vs. SCI Pharmtech | Adimmune Corp vs. Chunghwa Chemical Synthesis | Adimmune Corp vs. ScinoPharm Taiwan |
| Lotus Pharmaceutical vs. Center Laboratories | Lotus Pharmaceutical vs. Synmosa Biopharma | Lotus Pharmaceutical vs. Handa Pharmaceuticals | Lotus Pharmaceutical vs. DV Biomed Co |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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