Correlation Between Century Therapeutics and Lantern Pharma
Can any of the company-specific risk be diversified away by investing in both Century Therapeutics 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 Century Therapeutics and Lantern Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Therapeutics and Lantern Pharma, you can compare the effects of market volatilities on Century Therapeutics 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 Century Therapeutics with a short position of Lantern Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Therapeutics and Lantern Pharma.
Diversification Opportunities for Century Therapeutics and Lantern Pharma
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Century and Lantern is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Century Therapeutics and Lantern Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lantern Pharma and Century 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 Century Therapeutics 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 Century Therapeutics i.e., Century Therapeutics and Lantern Pharma go up and down completely randomly.
Pair Corralation between Century Therapeutics and Lantern Pharma
Given the investment horizon of 90 days Century Therapeutics is expected to generate 1.25 times more return on investment than Lantern Pharma. However, Century Therapeutics is 1.25 times more volatile than Lantern Pharma. It trades about 0.35 of its potential returns per unit of risk. Lantern Pharma is currently generating about 0.05 per unit of risk. If you would invest 115.00 in Century Therapeutics on September 1, 2024 and sell it today you would earn a total of 57.00 from holding Century Therapeutics or generate 49.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Century Therapeutics vs. Lantern Pharma
Performance |
| Timeline |
| Century Therapeutics |
| Lantern Pharma |
Century Therapeutics and Lantern Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Therapeutics and Lantern Pharma
The main advantage of trading using opposite Century Therapeutics and Lantern Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Therapeutics 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.| Century Therapeutics vs. Edgewise Therapeutics | Century Therapeutics vs. C4 Therapeutics | Century Therapeutics vs. Mineralys Therapeutics, Common | Century Therapeutics vs. Cullinan Oncology LLC |
| Lantern Pharma vs. Tff Pharmaceuticals | Lantern Pharma vs. Eliem Therapeutics | Lantern Pharma vs. Inhibrx | Lantern Pharma vs. Enliven 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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