Correlation Between Champions Oncology and Lumos Pharma
Can any of the company-specific risk be diversified away by investing in both Champions Oncology and Lumos 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 Champions Oncology and Lumos Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champions Oncology and Lumos Pharma, you can compare the effects of market volatilities on Champions Oncology and Lumos 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 Champions Oncology with a short position of Lumos Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champions Oncology and Lumos Pharma.
Diversification Opportunities for Champions Oncology and Lumos Pharma
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Champions and Lumos is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Champions Oncology and Lumos Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumos Pharma and Champions Oncology 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 Champions Oncology are associated (or correlated) with Lumos Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lumos Pharma has no effect on the direction of Champions Oncology i.e., Champions Oncology and Lumos Pharma go up and down completely randomly.
Pair Corralation between Champions Oncology and Lumos Pharma
Given the investment horizon of 90 days Champions Oncology is expected to generate 3.7 times more return on investment than Lumos Pharma. However, Champions Oncology is 3.7 times more volatile than Lumos Pharma. It trades about 0.08 of its potential returns per unit of risk. Lumos Pharma is currently generating about -0.16 per unit of risk. If you would invest 398.00 in Champions Oncology on August 28, 2024 and sell it today you would earn a total of 20.00 from holding Champions Oncology or generate 5.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champions Oncology vs. Lumos Pharma
Performance |
| Timeline |
| Champions Oncology |
| Lumos Pharma |
Champions Oncology and Lumos Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champions Oncology and Lumos Pharma
The main advantage of trading using opposite Champions Oncology and Lumos Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champions Oncology position performs unexpectedly, Lumos 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 Lumos Pharma will offset losses from the drop in Lumos Pharma's long position.| Champions Oncology vs. Molecular Partners AG | Champions Oncology vs. MediciNova | Champions Oncology vs. Anebulo Pharmaceuticals | Champions Oncology vs. Shattuck Labs |
| Lumos Pharma vs. Shattuck Labs | Lumos Pharma vs. Eliem Therapeutics | Lumos Pharma vs. Champions Oncology | Lumos Pharma vs. Century 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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