Correlation Between Applied Therapeutics and Lantern Pharma
Can any of the company-specific risk be diversified away by investing in both Applied Therapeutics and Lantern Pharma 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 Applied Therapeutics and Lantern Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Therapeutics and Lantern Pharma, you can compare the effects of market volatilities on Applied Therapeutics and Lantern Pharma 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 Applied Therapeutics with a short position of Lantern Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Therapeutics and Lantern Pharma.
Diversification Opportunities for Applied Therapeutics and Lantern Pharma
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Applied and Lantern is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Applied Therapeutics and Lantern Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lantern Pharma and Applied Therapeutics 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 Applied Therapeutics are associated (or correlated) with Lantern Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lantern Pharma has no effect on the direction of Applied Therapeutics i.e., Applied Therapeutics and Lantern Pharma go up and down completely randomly.
Pair Corralation between Applied Therapeutics and Lantern Pharma
Given the investment horizon of 90 days Applied Therapeutics is expected to generate 1.33 times more return on investment than Lantern Pharma. However, Applied Therapeutics is 1.33 times more volatile than Lantern Pharma. It trades about 0.1 of its potential returns per unit of risk. Lantern Pharma is currently generating about 0.01 per unit of risk. If you would invest 87.00 in Applied Therapeutics on August 29, 2024 and sell it today you would earn a total of 770.00 from holding Applied Therapeutics or generate 885.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Therapeutics vs. Lantern Pharma
Performance |
| Timeline |
| Applied Therapeutics |
| Lantern Pharma |
Applied Therapeutics and Lantern Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Therapeutics and Lantern Pharma
The main advantage of trading using opposite Applied Therapeutics and Lantern Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Therapeutics position performs unexpectedly, Lantern Pharma 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 Lantern Pharma will offset losses from the drop in Lantern Pharma's long position.| Applied Therapeutics vs. X4 Pharmaceuticals | Applied Therapeutics vs. Terns Pharmaceuticals | Applied Therapeutics vs. Day One Biopharmaceuticals | Applied Therapeutics vs. Hookipa Pharma |
| Lantern Pharma vs. Bright Minds Biosciences | Lantern Pharma vs. HP Inc | Lantern Pharma vs. Intel | Lantern Pharma vs. Chevron Corp |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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