Correlation Between Lifecore Biomedical and ProMIS Neurosciences
Can any of the company-specific risk be diversified away by investing in both Lifecore Biomedical and ProMIS Neurosciences 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 ProMIS Neurosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifecore Biomedical and ProMIS Neurosciences, you can compare the effects of market volatilities on Lifecore Biomedical and ProMIS Neurosciences 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 ProMIS Neurosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifecore Biomedical and ProMIS Neurosciences.
Diversification Opportunities for Lifecore Biomedical and ProMIS Neurosciences
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lifecore and ProMIS is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Lifecore Biomedical and ProMIS Neurosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProMIS Neurosciences 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 ProMIS Neurosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProMIS Neurosciences has no effect on the direction of Lifecore Biomedical i.e., Lifecore Biomedical and ProMIS Neurosciences go up and down completely randomly.
Pair Corralation between Lifecore Biomedical and ProMIS Neurosciences
Given the investment horizon of 90 days Lifecore Biomedical is expected to generate 1.03 times more return on investment than ProMIS Neurosciences. However, Lifecore Biomedical is 1.03 times more volatile than ProMIS Neurosciences. It trades about 0.06 of its potential returns per unit of risk. ProMIS Neurosciences is currently generating about -0.1 per unit of risk. If you would invest 477.00 in Lifecore Biomedical on December 5, 2024 and sell it today you would earn a total of 105.00 from holding Lifecore Biomedical or generate 22.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifecore Biomedical vs. ProMIS Neurosciences
Performance |
| Timeline |
| Lifecore Biomedical |
| ProMIS Neurosciences |
Lifecore Biomedical and ProMIS Neurosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifecore Biomedical and ProMIS Neurosciences
The main advantage of trading using opposite Lifecore Biomedical and ProMIS Neurosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifecore Biomedical position performs unexpectedly, ProMIS Neurosciences 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 ProMIS Neurosciences will offset losses from the drop in ProMIS Neurosciences' long position.| Lifecore Biomedical vs. Shuttle Pharmaceuticals | ||
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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