Correlation Between Avenue Therapeutics and Lixte Biotechnology
Can any of the company-specific risk be diversified away by investing in both Avenue Therapeutics and Lixte Biotechnology 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 Avenue Therapeutics and Lixte Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avenue Therapeutics and Lixte Biotechnology Holdings, you can compare the effects of market volatilities on Avenue Therapeutics and Lixte Biotechnology 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 Avenue Therapeutics with a short position of Lixte Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avenue Therapeutics and Lixte Biotechnology.
Diversification Opportunities for Avenue Therapeutics and Lixte Biotechnology
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Avenue and Lixte is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Avenue Therapeutics and Lixte Biotechnology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lixte Biotechnology and Avenue 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 Avenue Therapeutics are associated (or correlated) with Lixte Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lixte Biotechnology has no effect on the direction of Avenue Therapeutics i.e., Avenue Therapeutics and Lixte Biotechnology go up and down completely randomly.
Pair Corralation between Avenue Therapeutics and Lixte Biotechnology
Given the investment horizon of 90 days Avenue Therapeutics is expected to under-perform the Lixte Biotechnology. In addition to that, Avenue Therapeutics is 1.21 times more volatile than Lixte Biotechnology Holdings. It trades about -0.05 of its total potential returns per unit of risk. Lixte Biotechnology Holdings is currently generating about 0.01 per unit of volatility. If you would invest 233.00 in Lixte Biotechnology Holdings on August 26, 2024 and sell it today you would lose (70.00) from holding Lixte Biotechnology Holdings or give up 30.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avenue Therapeutics vs. Lixte Biotechnology Holdings
Performance |
| Timeline |
| Avenue Therapeutics |
| Lixte Biotechnology |
Avenue Therapeutics and Lixte Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avenue Therapeutics and Lixte Biotechnology
The main advantage of trading using opposite Avenue Therapeutics and Lixte Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avenue Therapeutics position performs unexpectedly, Lixte Biotechnology 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 Lixte Biotechnology will offset losses from the drop in Lixte Biotechnology's long position.| Avenue Therapeutics vs. Capricor Therapeutics | Avenue Therapeutics vs. Akari Therapeutics PLC | Avenue Therapeutics vs. Soleno Therapeutics | Avenue Therapeutics vs. Bio Path Holdings |
| Lixte Biotechnology vs. Allarity Therapeutics | Lixte Biotechnology vs. Neurobo Pharmaceuticals | Lixte Biotechnology vs. Virax Biolabs Group | Lixte Biotechnology vs. Quoin Pharmaceuticals Ltd |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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