Correlation Between Galera Therapeutics and LianBio ADR
Can any of the company-specific risk be diversified away by investing in both Galera Therapeutics and LianBio ADR 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 Galera Therapeutics and LianBio ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Galera Therapeutics and LianBio ADR, you can compare the effects of market volatilities on Galera Therapeutics and LianBio ADR 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 Galera Therapeutics with a short position of LianBio ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galera Therapeutics and LianBio ADR.
Diversification Opportunities for Galera Therapeutics and LianBio ADR
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Galera and LianBio is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Galera Therapeutics and LianBio ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LianBio ADR and Galera 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 Galera Therapeutics are associated (or correlated) with LianBio ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LianBio ADR has no effect on the direction of Galera Therapeutics i.e., Galera Therapeutics and LianBio ADR go up and down completely randomly.
Pair Corralation between Galera Therapeutics and LianBio ADR
Given the investment horizon of 90 days Galera Therapeutics is expected to under-perform the LianBio ADR. In addition to that, Galera Therapeutics is 1.0 times more volatile than LianBio ADR. It trades about -0.1 of its total potential returns per unit of risk. LianBio ADR is currently generating about 0.01 per unit of volatility. If you would invest 220.00 in LianBio ADR on August 31, 2024 and sell it today you would lose (2.00) from holding LianBio ADR or give up 0.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Galera Therapeutics vs. LianBio ADR
Performance |
| Timeline |
| Galera Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| LianBio ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Galera Therapeutics and LianBio ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galera Therapeutics and LianBio ADR
The main advantage of trading using opposite Galera Therapeutics and LianBio ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galera Therapeutics position performs unexpectedly, LianBio ADR 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 LianBio ADR will offset losses from the drop in LianBio ADR's long position.| Galera Therapeutics vs. Mereo BioPharma Group | Galera Therapeutics vs. Terns Pharmaceuticals | Galera Therapeutics vs. PDS Biotechnology Corp | Galera Therapeutics vs. Inozyme Pharma |
| LianBio ADR vs. Sensei Biotherapeutics | LianBio ADR vs. NextCure | LianBio ADR vs. Nuvation Bio | LianBio ADR vs. Inozyme Pharma |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |