Correlation Between Lifecore Biomedical and Haleon Plc
Can any of the company-specific risk be diversified away by investing in both Lifecore Biomedical and Haleon Plc 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 Lifecore Biomedical and Haleon Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifecore Biomedical and Haleon plc, you can compare the effects of market volatilities on Lifecore Biomedical and Haleon Plc 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 Lifecore Biomedical with a short position of Haleon Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifecore Biomedical and Haleon Plc.
Diversification Opportunities for Lifecore Biomedical and Haleon Plc
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lifecore and Haleon is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Lifecore Biomedical and Haleon plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haleon plc and Lifecore Biomedical 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 Lifecore Biomedical are associated (or correlated) with Haleon Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haleon plc has no effect on the direction of Lifecore Biomedical i.e., Lifecore Biomedical and Haleon Plc go up and down completely randomly.
Pair Corralation between Lifecore Biomedical and Haleon Plc
Given the investment horizon of 90 days Lifecore Biomedical is expected to generate 4.25 times more return on investment than Haleon Plc. However, Lifecore Biomedical is 4.25 times more volatile than Haleon plc. It trades about 0.28 of its potential returns per unit of risk. Haleon plc is currently generating about -0.03 per unit of risk. If you would invest 588.00 in Lifecore Biomedical on September 2, 2024 and sell it today you would earn a total of 153.00 from holding Lifecore Biomedical or generate 26.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifecore Biomedical vs. Haleon plc
Performance |
| Timeline |
| Lifecore Biomedical |
| Haleon plc |
Lifecore Biomedical and Haleon Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifecore Biomedical and Haleon Plc
The main advantage of trading using opposite Lifecore Biomedical and Haleon Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifecore Biomedical position performs unexpectedly, Haleon Plc 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 Haleon Plc will offset losses from the drop in Haleon Plc's long position.| Lifecore Biomedical vs. Shuttle Pharmaceuticals | Lifecore Biomedical vs. Catalent | Lifecore Biomedical vs. Tilray Inc | Lifecore Biomedical vs. Kamada |
| Haleon Plc vs. Tff Pharmaceuticals | Haleon Plc vs. Eliem Therapeutics | Haleon Plc vs. Inhibrx | Haleon Plc 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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