Correlation Between LianBio ADR and Passage Bio
Can any of the company-specific risk be diversified away by investing in both LianBio ADR and Passage Bio 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 LianBio ADR and Passage Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LianBio ADR and Passage Bio, you can compare the effects of market volatilities on LianBio ADR and Passage Bio 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 LianBio ADR with a short position of Passage Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of LianBio ADR and Passage Bio.
Diversification Opportunities for LianBio ADR and Passage Bio
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between LianBio and Passage is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding LianBio ADR and Passage Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Passage Bio and LianBio ADR 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 LianBio ADR are associated (or correlated) with Passage Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Passage Bio has no effect on the direction of LianBio ADR i.e., LianBio ADR and Passage Bio go up and down completely randomly.
Pair Corralation between LianBio ADR and Passage Bio
If you would invest 218.00 in LianBio ADR on November 2, 2024 and sell it today you would earn a total of 0.00 from holding LianBio ADR or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 5.26% |
| Values | Daily Returns |
LianBio ADR vs. Passage Bio
Performance |
| Timeline |
| LianBio ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Passage Bio |
LianBio ADR and Passage Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LianBio ADR and Passage Bio
The main advantage of trading using opposite LianBio ADR and Passage Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LianBio ADR position performs unexpectedly, Passage Bio 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 Passage Bio will offset losses from the drop in Passage Bio's long position.| LianBio ADR vs. Sensei Biotherapeutics | LianBio ADR vs. NextCure | LianBio ADR vs. Nuvation Bio | LianBio ADR vs. Inozyme Pharma |
| Passage Bio vs. Black Diamond Therapeutics | Passage Bio vs. Revolution Medicines | Passage Bio vs. Stoke Therapeutics | Passage Bio vs. Cabaletta Bio |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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