Correlation Between Frequency Therapeutics and Lixte Biotechnology
Can any of the company-specific risk be diversified away by investing in both Frequency Therapeutics and Lixte Biotechnology 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 Frequency Therapeutics and Lixte Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Frequency Therapeutics and Lixte Biotechnology Holdings, you can compare the effects of market volatilities on Frequency Therapeutics and Lixte Biotechnology 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 Frequency Therapeutics with a short position of Lixte Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frequency Therapeutics and Lixte Biotechnology.
Diversification Opportunities for Frequency Therapeutics and Lixte Biotechnology
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Frequency and Lixte is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Frequency Therapeutics and Lixte Biotechnology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lixte Biotechnology and Frequency 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 Frequency Therapeutics are associated (or correlated) with Lixte Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lixte Biotechnology has no effect on the direction of Frequency Therapeutics i.e., Frequency Therapeutics and Lixte Biotechnology go up and down completely randomly.
Pair Corralation between Frequency Therapeutics and Lixte Biotechnology
Given the investment horizon of 90 days Frequency Therapeutics is expected to under-perform the Lixte Biotechnology. But the stock apears to be less risky and, when comparing its historical volatility, Frequency Therapeutics is 1.05 times less risky than Lixte Biotechnology. The stock trades about -0.21 of its potential returns per unit of risk. The Lixte Biotechnology Holdings is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 222.00 in Lixte Biotechnology Holdings on November 3, 2024 and sell it today you would earn a total of 26.00 from holding Lixte Biotechnology Holdings or generate 11.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Frequency Therapeutics vs. Lixte Biotechnology Holdings
Performance |
| Timeline |
| Frequency Therapeutics |
| Lixte Biotechnology |
Frequency Therapeutics and Lixte Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Frequency Therapeutics and Lixte Biotechnology
The main advantage of trading using opposite Frequency Therapeutics and Lixte Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frequency Therapeutics position performs unexpectedly, Lixte Biotechnology 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 Lixte Biotechnology will offset losses from the drop in Lixte Biotechnology's long position.| Frequency Therapeutics vs. Modine Manufacturing | Frequency Therapeutics vs. Arrow Electronics | Frequency Therapeutics vs. Lucid Group | Frequency Therapeutics vs. Alvotech |
| Lixte Biotechnology vs. Allarity Therapeutics | Lixte Biotechnology vs. Virax Biolabs Group | Lixte Biotechnology vs. Quoin Pharmaceuticals Ltd | Lixte Biotechnology vs. Indaptus 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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