Correlation Between Now and Lifeline Biotechnologies
Can any of the company-specific risk be diversified away by investing in both Now 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 Now and Lifeline Biotechnologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Now Inc and Lifeline Biotechnologies, you can compare the effects of market volatilities on Now 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 Now with a short position of Lifeline Biotechnologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Now and Lifeline Biotechnologies.
Diversification Opportunities for Now and Lifeline Biotechnologies
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Now and Lifeline is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Now Inc and Lifeline Biotechnologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifeline Biotechnologies and Now 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 Now Inc 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 Now i.e., Now and Lifeline Biotechnologies go up and down completely randomly.
Pair Corralation between Now and Lifeline Biotechnologies
Given the investment horizon of 90 days Now Inc is expected to generate 0.23 times more return on investment than Lifeline Biotechnologies. However, Now Inc is 4.26 times less risky than Lifeline Biotechnologies. It trades about 0.29 of its potential returns per unit of risk. Lifeline Biotechnologies is currently generating about -0.22 per unit of risk. If you would invest 1,302 in Now Inc on November 6, 2024 and sell it today you would earn a total of 189.00 from holding Now Inc or generate 14.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Now Inc vs. Lifeline Biotechnologies
Performance |
| Timeline |
| Now Inc |
| Lifeline Biotechnologies |
Now and Lifeline Biotechnologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Now and Lifeline Biotechnologies
The main advantage of trading using opposite Now and Lifeline Biotechnologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Now 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.| Now vs. Oil States International | Now vs. Oceaneering International | Now vs. Geospace Technologies | Now vs. Enerflex |
| Lifeline Biotechnologies vs. Rimrock Gold Corp | Lifeline Biotechnologies vs. V Group | Lifeline Biotechnologies vs. Protext Mobility | Lifeline Biotechnologies vs. SNM Gobal Holdings |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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