Correlation Between LMF Acquisition and Humacyte
Can any of the company-specific risk be diversified away by investing in both LMF Acquisition and Humacyte 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 Humacyte 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 Humacyte, you can compare the effects of market volatilities on LMF Acquisition and Humacyte 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 Humacyte. Check out your portfolio center. Please also check ongoing floating volatility patterns of LMF Acquisition and Humacyte.
Diversification Opportunities for LMF Acquisition and Humacyte
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between LMF and Humacyte is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding LMF Acquisition Opportunities and Humacyte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humacyte 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 Humacyte. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humacyte has no effect on the direction of LMF Acquisition i.e., LMF Acquisition and Humacyte go up and down completely randomly.
Pair Corralation between LMF Acquisition and Humacyte
Assuming the 90 days horizon LMF Acquisition Opportunities is expected to generate 1.57 times more return on investment than Humacyte. However, LMF Acquisition is 1.57 times more volatile than Humacyte. It trades about 0.07 of its potential returns per unit of risk. Humacyte is currently generating about 0.1 per unit of risk. If you would invest 4.35 in LMF Acquisition Opportunities on November 9, 2024 and sell it today you would lose (0.36) from holding LMF Acquisition Opportunities or give up 8.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.25% |
| Values | Daily Returns |
LMF Acquisition Opportunities vs. Humacyte
Performance |
| Timeline |
| LMF Acquisition Oppo |
| Humacyte |
LMF Acquisition and Humacyte Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LMF Acquisition and Humacyte
The main advantage of trading using opposite LMF Acquisition and Humacyte positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LMF Acquisition position performs unexpectedly, Humacyte 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 Humacyte will offset losses from the drop in Humacyte's long position.| LMF Acquisition vs. LMF Acquisition Opportunities | LMF Acquisition vs. Cardio Diagnostics Holdings | LMF Acquisition vs. Revelation Biosciences | LMF Acquisition vs. OmniAb Inc |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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