Correlation Between Bionomics and LAVA Therapeutics
Can any of the company-specific risk be diversified away by investing in both Bionomics and LAVA Therapeutics 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 Bionomics and LAVA Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bionomics Ltd ADR and LAVA Therapeutics NV, you can compare the effects of market volatilities on Bionomics and LAVA Therapeutics 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 Bionomics with a short position of LAVA Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bionomics and LAVA Therapeutics.
Diversification Opportunities for Bionomics and LAVA Therapeutics
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bionomics and LAVA is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Bionomics Ltd ADR and LAVA Therapeutics NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LAVA Therapeutics and Bionomics 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 Bionomics Ltd ADR are associated (or correlated) with LAVA Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LAVA Therapeutics has no effect on the direction of Bionomics i.e., Bionomics and LAVA Therapeutics go up and down completely randomly.
Pair Corralation between Bionomics and LAVA Therapeutics
Given the investment horizon of 90 days Bionomics Ltd ADR is expected to generate 4.32 times more return on investment than LAVA Therapeutics. However, Bionomics is 4.32 times more volatile than LAVA Therapeutics NV. It trades about 0.1 of its potential returns per unit of risk. LAVA Therapeutics NV is currently generating about 0.0 per unit of risk. If you would invest 26.00 in Bionomics Ltd ADR on September 13, 2024 and sell it today you would earn a total of 4.00 from holding Bionomics Ltd ADR or generate 15.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bionomics Ltd ADR vs. LAVA Therapeutics NV
Performance |
| Timeline |
| Bionomics ADR |
| LAVA Therapeutics |
Bionomics and LAVA Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bionomics and LAVA Therapeutics
The main advantage of trading using opposite Bionomics and LAVA Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bionomics position performs unexpectedly, LAVA Therapeutics 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 LAVA Therapeutics will offset losses from the drop in LAVA Therapeutics' long position.| Bionomics vs. Puma Biotechnology | Bionomics vs. Iovance Biotherapeutics | Bionomics vs. Sarepta Therapeutics | Bionomics vs. Day One Biopharmaceuticals |
| LAVA Therapeutics vs. Anebulo Pharmaceuticals | LAVA Therapeutics vs. Pmv Pharmaceuticals | LAVA Therapeutics vs. Bionomics Ltd ADR | LAVA Therapeutics vs. Edgewise Therapeutics |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |