Correlation Between American Scientf and Lifeline Biotechnologies
Can any of the company-specific risk be diversified away by investing in both American Scientf and Lifeline Biotechnologies 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 American Scientf and Lifeline Biotechnologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Scientf and Lifeline Biotechnologies, you can compare the effects of market volatilities on American Scientf and Lifeline Biotechnologies 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 American Scientf with a short position of Lifeline Biotechnologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Scientf and Lifeline Biotechnologies.
Diversification Opportunities for American Scientf and Lifeline Biotechnologies
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Lifeline is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding American Scientf and Lifeline Biotechnologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifeline Biotechnologies and American Scientf 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 American Scientf are associated (or correlated) with Lifeline Biotechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifeline Biotechnologies has no effect on the direction of American Scientf i.e., American Scientf and Lifeline Biotechnologies go up and down completely randomly.
Pair Corralation between American Scientf and Lifeline Biotechnologies
Given the investment horizon of 90 days American Scientf is expected to generate 4.05 times less return on investment than Lifeline Biotechnologies. But when comparing it to its historical volatility, American Scientf is 1.67 times less risky than Lifeline Biotechnologies. It trades about 0.07 of its potential returns per unit of risk. Lifeline Biotechnologies is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Lifeline Biotechnologies on October 12, 2024 and sell it today you would earn a total of 0.02 from holding Lifeline Biotechnologies or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.59% |
| Values | Daily Returns |
American Scientf vs. Lifeline Biotechnologies
Performance |
| Timeline |
| American Scientf |
| Lifeline Biotechnologies |
American Scientf and Lifeline Biotechnologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Scientf and Lifeline Biotechnologies
The main advantage of trading using opposite American Scientf and Lifeline Biotechnologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Scientf position performs unexpectedly, Lifeline Biotechnologies 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 Lifeline Biotechnologies will offset losses from the drop in Lifeline Biotechnologies' long position.| American Scientf vs. Oatly Group AB | American Scientf vs. Diamond Estates Wines | American Scientf vs. Constellation Brands Class | American Scientf vs. Brandywine Realty Trust |
| Lifeline Biotechnologies vs. Modular Medical | Lifeline Biotechnologies vs. Neuropace | Lifeline Biotechnologies vs. Nexalin Technology | Lifeline Biotechnologies vs. STRATA Skin Sciences |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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