Correlation Between LMF Acquisition and Hillstream Biopharma
Can any of the company-specific risk be diversified away by investing in both LMF Acquisition and Hillstream Biopharma 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 LMF Acquisition and Hillstream Biopharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LMF Acquisition Opportunities and Hillstream Biopharma, you can compare the effects of market volatilities on LMF Acquisition and Hillstream Biopharma 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 LMF Acquisition with a short position of Hillstream Biopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of LMF Acquisition and Hillstream Biopharma.
Diversification Opportunities for LMF Acquisition and Hillstream Biopharma
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LMF and Hillstream is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding LMF Acquisition Opportunities and Hillstream Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hillstream Biopharma and LMF Acquisition 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 LMF Acquisition Opportunities are associated (or correlated) with Hillstream Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hillstream Biopharma has no effect on the direction of LMF Acquisition i.e., LMF Acquisition and Hillstream Biopharma go up and down completely randomly.
Pair Corralation between LMF Acquisition and Hillstream Biopharma
Considering the 90-day investment horizon LMF Acquisition Opportunities is expected to under-perform the Hillstream Biopharma. In addition to that, LMF Acquisition is 2.27 times more volatile than Hillstream Biopharma. It trades about -0.02 of its total potential returns per unit of risk. Hillstream Biopharma is currently generating about -0.01 per unit of volatility. If you would invest 43.00 in Hillstream Biopharma on August 29, 2024 and sell it today you would lose (4.00) from holding Hillstream Biopharma or give up 9.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 13.49% |
| Values | Daily Returns |
LMF Acquisition Opportunities vs. Hillstream Biopharma
Performance |
| Timeline |
| LMF Acquisition Oppo |
| Hillstream Biopharma |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
LMF Acquisition and Hillstream Biopharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LMF Acquisition and Hillstream Biopharma
The main advantage of trading using opposite LMF Acquisition and Hillstream Biopharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LMF Acquisition position performs unexpectedly, Hillstream Biopharma 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 Hillstream Biopharma will offset losses from the drop in Hillstream Biopharma's long position.| LMF Acquisition vs. ZyVersa Therapeutics | LMF Acquisition vs. Sonnet Biotherapeutics Holdings | LMF Acquisition vs. Revelation Biosciences | LMF Acquisition vs. Quoin Pharmaceuticals Ltd |
| Hillstream Biopharma vs. Virax Biolabs Group | Hillstream Biopharma vs. Revelation Biosciences | Hillstream Biopharma vs. Kiora Pharmaceuticals | Hillstream Biopharma vs. ZyVersa 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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