Correlation Between Century Therapeutics and Lumos Pharma
Can any of the company-specific risk be diversified away by investing in both Century Therapeutics and Lumos 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 Lumos 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 Lumos Pharma, you can compare the effects of market volatilities on Century Therapeutics and Lumos 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 Lumos Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Therapeutics and Lumos Pharma.
Diversification Opportunities for Century Therapeutics and Lumos Pharma
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Century and Lumos is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Century Therapeutics and Lumos Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumos 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 Lumos Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lumos Pharma has no effect on the direction of Century Therapeutics i.e., Century Therapeutics and Lumos Pharma go up and down completely randomly.
Pair Corralation between Century Therapeutics and Lumos Pharma
Given the investment horizon of 90 days Century Therapeutics is expected to under-perform the Lumos Pharma. In addition to that, Century Therapeutics is 5.92 times more volatile than Lumos Pharma. It trades about -0.1 of its total potential returns per unit of risk. Lumos Pharma is currently generating about -0.04 per unit of volatility. If you would invest 440.00 in Lumos Pharma on October 25, 2024 and sell it today you would lose (6.00) from holding Lumos Pharma or give up 1.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 56.67% |
| Values | Daily Returns |
Century Therapeutics vs. Lumos Pharma
Performance |
| Timeline |
| Century Therapeutics |
| Lumos Pharma |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Century Therapeutics and Lumos Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Therapeutics and Lumos Pharma
The main advantage of trading using opposite Century Therapeutics and Lumos Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Therapeutics position performs unexpectedly, Lumos 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 Lumos Pharma will offset losses from the drop in Lumos 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 |
| Lumos Pharma vs. Shattuck Labs | Lumos Pharma vs. Champions Oncology | Lumos Pharma vs. Century Therapeutics | Lumos Pharma vs. Silo 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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