Correlation Between Lexaria Bioscience and Evogene
Can any of the company-specific risk be diversified away by investing in both Lexaria Bioscience and Evogene 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 Lexaria Bioscience and Evogene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lexaria Bioscience Corp and Evogene, you can compare the effects of market volatilities on Lexaria Bioscience and Evogene 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 Lexaria Bioscience with a short position of Evogene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lexaria Bioscience and Evogene.
Diversification Opportunities for Lexaria Bioscience and Evogene
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lexaria and Evogene is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Lexaria Bioscience Corp and Evogene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evogene and Lexaria Bioscience 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 Lexaria Bioscience Corp are associated (or correlated) with Evogene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evogene has no effect on the direction of Lexaria Bioscience i.e., Lexaria Bioscience and Evogene go up and down completely randomly.
Pair Corralation between Lexaria Bioscience and Evogene
Given the investment horizon of 90 days Lexaria Bioscience Corp is expected to under-perform the Evogene. But the stock apears to be less risky and, when comparing its historical volatility, Lexaria Bioscience Corp is 1.12 times less risky than Evogene. The stock trades about -0.29 of its potential returns per unit of risk. The Evogene is currently generating about -0.21 of returns per unit of risk over similar time horizon. If you would invest 190.00 in Evogene on November 4, 2024 and sell it today you would lose (33.00) from holding Evogene or give up 17.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lexaria Bioscience Corp vs. Evogene
Performance |
| Timeline |
| Lexaria Bioscience Corp |
| Evogene |
Lexaria Bioscience and Evogene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lexaria Bioscience and Evogene
The main advantage of trading using opposite Lexaria Bioscience and Evogene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lexaria Bioscience position performs unexpectedly, Evogene 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 Evogene will offset losses from the drop in Evogene's long position.| Lexaria Bioscience vs. Revelation Biosciences | Lexaria Bioscience vs. Zura Bio Limited | Lexaria Bioscience vs. Phio Pharmaceuticals Corp | Lexaria Bioscience vs. ZyVersa Therapeutics |
| Evogene vs. Arcus Biosciences | Evogene vs. Fate Therapeutics | Evogene vs. Pluri Inc | Evogene vs. Lexaria Bioscience Corp |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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