Correlation Between Better Therapeutics and Lantern Pharma
Can any of the company-specific risk be diversified away by investing in both Better 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 Better 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 Better Therapeutics and Lantern Pharma, you can compare the effects of market volatilities on Better 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 Better Therapeutics with a short position of Lantern Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Better Therapeutics and Lantern Pharma.
Diversification Opportunities for Better Therapeutics and Lantern Pharma
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Better and Lantern is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Better Therapeutics and Lantern Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lantern Pharma and Better 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 Better 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 Better Therapeutics i.e., Better Therapeutics and Lantern Pharma go up and down completely randomly.
Pair Corralation between Better Therapeutics and Lantern Pharma
If you would invest 349.00 in Lantern Pharma on September 15, 2024 and sell it today you would lose (4.00) from holding Lantern Pharma or give up 1.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Better Therapeutics vs. Lantern Pharma
Performance |
| Timeline |
| Better Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Lantern Pharma |
Better Therapeutics and Lantern Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Better Therapeutics and Lantern Pharma
The main advantage of trading using opposite Better Therapeutics and Lantern Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Better 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.| Better Therapeutics vs. ABVC Biopharma | Better Therapeutics vs. Indaptus Therapeutics | Better Therapeutics vs. Pasithea Therapeutics Corp | Better Therapeutics vs. Forte Biosciences |
| Lantern Pharma vs. Tff Pharmaceuticals | Lantern Pharma vs. Generation Bio Co | Lantern Pharma vs. Lyra Therapeutics | Lantern Pharma vs. Immunome |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |