Correlation Between Eupraxia Pharmaceuticals and Lumos Pharma
Can any of the company-specific risk be diversified away by investing in both Eupraxia Pharmaceuticals 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 Eupraxia Pharmaceuticals and Lumos Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eupraxia Pharmaceuticals and Lumos Pharma, you can compare the effects of market volatilities on Eupraxia Pharmaceuticals 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 Eupraxia Pharmaceuticals with a short position of Lumos Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eupraxia Pharmaceuticals and Lumos Pharma.
Diversification Opportunities for Eupraxia Pharmaceuticals and Lumos Pharma
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eupraxia and Lumos is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Eupraxia Pharmaceuticals and Lumos Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumos Pharma and Eupraxia Pharmaceuticals 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 Eupraxia Pharmaceuticals 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 Eupraxia Pharmaceuticals i.e., Eupraxia Pharmaceuticals and Lumos Pharma go up and down completely randomly.
Pair Corralation between Eupraxia Pharmaceuticals and Lumos Pharma
Assuming the 90 days horizon Eupraxia Pharmaceuticals is expected to generate 2.13 times less return on investment than Lumos Pharma. But when comparing it to its historical volatility, Eupraxia Pharmaceuticals is 1.08 times less risky than Lumos Pharma. It trades about 0.02 of its potential returns per unit of risk. Lumos Pharma is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 336.00 in Lumos Pharma on November 4, 2024 and sell it today you would earn a total of 98.00 from holding Lumos Pharma or generate 29.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 71.43% |
| Values | Daily Returns |
Eupraxia Pharmaceuticals vs. Lumos Pharma
Performance |
| Timeline |
| Eupraxia Pharmaceuticals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Lumos Pharma |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Eupraxia Pharmaceuticals and Lumos Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eupraxia Pharmaceuticals and Lumos Pharma
The main advantage of trading using opposite Eupraxia Pharmaceuticals and Lumos Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eupraxia Pharmaceuticals 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.| Eupraxia Pharmaceuticals vs. Akeso, Inc | Eupraxia Pharmaceuticals vs. Ascletis Pharma | Eupraxia Pharmaceuticals vs. Avax Techs | Eupraxia Pharmaceuticals vs. Inhibrx |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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