Correlation Between Lixte Biotechnology and Avenue Therapeutics
Can any of the company-specific risk be diversified away by investing in both Lixte Biotechnology and Avenue Therapeutics 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 Lixte Biotechnology and Avenue Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lixte Biotechnology Holdings and Avenue Therapeutics, you can compare the effects of market volatilities on Lixte Biotechnology and Avenue Therapeutics 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 Lixte Biotechnology with a short position of Avenue Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lixte Biotechnology and Avenue Therapeutics.
Diversification Opportunities for Lixte Biotechnology and Avenue Therapeutics
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lixte and Avenue is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Lixte Biotechnology Holdings and Avenue Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avenue Therapeutics and Lixte Biotechnology 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 Lixte Biotechnology Holdings are associated (or correlated) with Avenue Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avenue Therapeutics has no effect on the direction of Lixte Biotechnology i.e., Lixte Biotechnology and Avenue Therapeutics go up and down completely randomly.
Pair Corralation between Lixte Biotechnology and Avenue Therapeutics
Given the investment horizon of 90 days Lixte Biotechnology Holdings is expected to generate 0.82 times more return on investment than Avenue Therapeutics. However, Lixte Biotechnology Holdings is 1.21 times less risky than Avenue Therapeutics. It trades about 0.01 of its potential returns per unit of risk. Avenue Therapeutics is currently generating about -0.05 per unit of risk. If you would invest 233.00 in Lixte Biotechnology Holdings on August 26, 2024 and sell it today you would lose (70.00) from holding Lixte Biotechnology Holdings or give up 30.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lixte Biotechnology Holdings vs. Avenue Therapeutics
Performance |
| Timeline |
| Lixte Biotechnology |
| Avenue Therapeutics |
Lixte Biotechnology and Avenue Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lixte Biotechnology and Avenue Therapeutics
The main advantage of trading using opposite Lixte Biotechnology and Avenue Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lixte Biotechnology position performs unexpectedly, Avenue Therapeutics 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 Avenue Therapeutics will offset losses from the drop in Avenue Therapeutics' long position.| Lixte Biotechnology vs. Allarity Therapeutics | Lixte Biotechnology vs. Neurobo Pharmaceuticals | Lixte Biotechnology vs. Virax Biolabs Group | Lixte Biotechnology vs. Quoin Pharmaceuticals Ltd |
| Avenue Therapeutics vs. Capricor Therapeutics | Avenue Therapeutics vs. Akari Therapeutics PLC | Avenue Therapeutics vs. Soleno Therapeutics | Avenue Therapeutics vs. Bio Path Holdings |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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