Correlation Between Longboard Pharmaceuticals and Pulmatrix
Can any of the company-specific risk be diversified away by investing in both Longboard Pharmaceuticals and Pulmatrix 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 Longboard Pharmaceuticals and Pulmatrix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Longboard Pharmaceuticals and Pulmatrix, you can compare the effects of market volatilities on Longboard Pharmaceuticals and Pulmatrix 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 Longboard Pharmaceuticals with a short position of Pulmatrix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longboard Pharmaceuticals and Pulmatrix.
Diversification Opportunities for Longboard Pharmaceuticals and Pulmatrix
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Longboard and Pulmatrix is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Longboard Pharmaceuticals and Pulmatrix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pulmatrix and Longboard Pharmaceuticals 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 Longboard Pharmaceuticals are associated (or correlated) with Pulmatrix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pulmatrix has no effect on the direction of Longboard Pharmaceuticals i.e., Longboard Pharmaceuticals and Pulmatrix go up and down completely randomly.
Pair Corralation between Longboard Pharmaceuticals and Pulmatrix
Given the investment horizon of 90 days Longboard Pharmaceuticals is expected to generate 3.01 times more return on investment than Pulmatrix. However, Longboard Pharmaceuticals is 3.01 times more volatile than Pulmatrix. It trades about 0.07 of its potential returns per unit of risk. Pulmatrix is currently generating about 0.07 per unit of risk. If you would invest 745.00 in Longboard Pharmaceuticals on September 1, 2024 and sell it today you would earn a total of 5,253 from holding Longboard Pharmaceuticals or generate 705.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Longboard Pharmaceuticals vs. Pulmatrix
Performance |
| Timeline |
| Longboard Pharmaceuticals |
| Pulmatrix |
Longboard Pharmaceuticals and Pulmatrix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Longboard Pharmaceuticals and Pulmatrix
The main advantage of trading using opposite Longboard Pharmaceuticals and Pulmatrix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longboard Pharmaceuticals position performs unexpectedly, Pulmatrix 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 Pulmatrix will offset losses from the drop in Pulmatrix's long position.| Longboard Pharmaceuticals vs. Molecular Partners AG | Longboard Pharmaceuticals vs. MediciNova | Longboard Pharmaceuticals vs. Anebulo Pharmaceuticals | Longboard Pharmaceuticals vs. Champions Oncology |
| Pulmatrix vs. Capricor Therapeutics | Pulmatrix vs. Akari Therapeutics PLC | Pulmatrix vs. Soleno Therapeutics | Pulmatrix vs. Bio Path Holdings |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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