Correlation Between Lifecore Biomedical and Sonoma Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Lifecore Biomedical and Sonoma Pharmaceuticals 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 Sonoma Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifecore Biomedical and Sonoma Pharmaceuticals, you can compare the effects of market volatilities on Lifecore Biomedical and Sonoma Pharmaceuticals 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 Sonoma Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifecore Biomedical and Sonoma Pharmaceuticals.
Diversification Opportunities for Lifecore Biomedical and Sonoma Pharmaceuticals
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lifecore and Sonoma is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Lifecore Biomedical and Sonoma Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonoma Pharmaceuticals 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 Sonoma Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonoma Pharmaceuticals has no effect on the direction of Lifecore Biomedical i.e., Lifecore Biomedical and Sonoma Pharmaceuticals go up and down completely randomly.
Pair Corralation between Lifecore Biomedical and Sonoma Pharmaceuticals
Given the investment horizon of 90 days Lifecore Biomedical is expected to generate 0.51 times more return on investment than Sonoma Pharmaceuticals. However, Lifecore Biomedical is 1.96 times less risky than Sonoma Pharmaceuticals. It trades about 0.01 of its potential returns per unit of risk. Sonoma Pharmaceuticals is currently generating about -0.02 per unit of risk. If you would invest 942.00 in Lifecore Biomedical on August 28, 2024 and sell it today you would lose (196.00) from holding Lifecore Biomedical or give up 20.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifecore Biomedical vs. Sonoma Pharmaceuticals
Performance |
| Timeline |
| Lifecore Biomedical |
| Sonoma Pharmaceuticals |
Lifecore Biomedical and Sonoma Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifecore Biomedical and Sonoma Pharmaceuticals
The main advantage of trading using opposite Lifecore Biomedical and Sonoma Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifecore Biomedical position performs unexpectedly, Sonoma Pharmaceuticals 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 Sonoma Pharmaceuticals will offset losses from the drop in Sonoma Pharmaceuticals' long position.| Lifecore Biomedical vs. Eliem Therapeutics | Lifecore Biomedical vs. HCW Biologics | Lifecore Biomedical vs. Scpharmaceuticals | Lifecore Biomedical vs. Milestone Pharmaceuticals |
| Sonoma Pharmaceuticals vs. China Pharma Holdings | Sonoma Pharmaceuticals vs. Universe Pharmaceuticals | Sonoma Pharmaceuticals vs. Akanda Corp | Sonoma Pharmaceuticals vs. Petros Pharmaceuticals |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Stocks Directory Find actively traded stocks across global markets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |