Correlation Between Fennec Pharmaceuticals and Lantern Pharma
Can any of the company-specific risk be diversified away by investing in both Fennec Pharmaceuticals 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 Fennec Pharmaceuticals and Lantern Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fennec Pharmaceuticals and Lantern Pharma, you can compare the effects of market volatilities on Fennec Pharmaceuticals 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 Fennec Pharmaceuticals with a short position of Lantern Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fennec Pharmaceuticals and Lantern Pharma.
Diversification Opportunities for Fennec Pharmaceuticals and Lantern Pharma
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fennec and Lantern is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Fennec Pharmaceuticals and Lantern Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lantern Pharma and Fennec 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 Fennec Pharmaceuticals 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 Fennec Pharmaceuticals i.e., Fennec Pharmaceuticals and Lantern Pharma go up and down completely randomly.
Pair Corralation between Fennec Pharmaceuticals and Lantern Pharma
Given the investment horizon of 90 days Fennec Pharmaceuticals is expected to generate 1.17 times more return on investment than Lantern Pharma. However, Fennec Pharmaceuticals is 1.17 times more volatile than Lantern Pharma. It trades about 0.22 of its potential returns per unit of risk. Lantern Pharma is currently generating about -0.14 per unit of risk. If you would invest 473.00 in Fennec Pharmaceuticals on August 29, 2024 and sell it today you would earn a total of 131.00 from holding Fennec Pharmaceuticals or generate 27.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fennec Pharmaceuticals vs. Lantern Pharma
Performance |
| Timeline |
| Fennec Pharmaceuticals |
| Lantern Pharma |
Fennec Pharmaceuticals and Lantern Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fennec Pharmaceuticals and Lantern Pharma
The main advantage of trading using opposite Fennec Pharmaceuticals and Lantern Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fennec Pharmaceuticals 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.| Fennec Pharmaceuticals vs. Eliem Therapeutics | Fennec Pharmaceuticals vs. Scpharmaceuticals | Fennec Pharmaceuticals vs. Milestone Pharmaceuticals | Fennec Pharmaceuticals vs. Seres Therapeutics |
| 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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