Correlation Between Lixte Biotechnology and Benitec Biopharma
Can any of the company-specific risk be diversified away by investing in both Lixte Biotechnology and Benitec Biopharma 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 Benitec Biopharma 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 Benitec Biopharma Ltd, you can compare the effects of market volatilities on Lixte Biotechnology and Benitec Biopharma 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 Benitec Biopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lixte Biotechnology and Benitec Biopharma.
Diversification Opportunities for Lixte Biotechnology and Benitec Biopharma
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lixte and Benitec is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Lixte Biotechnology Holdings and Benitec Biopharma Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benitec Biopharma 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 Benitec Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benitec Biopharma has no effect on the direction of Lixte Biotechnology i.e., Lixte Biotechnology and Benitec Biopharma go up and down completely randomly.
Pair Corralation between Lixte Biotechnology and Benitec Biopharma
Given the investment horizon of 90 days Lixte Biotechnology Holdings is expected to generate 1.86 times more return on investment than Benitec Biopharma. However, Lixte Biotechnology is 1.86 times more volatile than Benitec Biopharma Ltd. It trades about 0.07 of its potential returns per unit of risk. Benitec Biopharma Ltd is currently generating about -0.03 per unit of risk. If you would invest 211.00 in Lixte Biotechnology Holdings on September 1, 2024 and sell it today you would earn a total of 12.00 from holding Lixte Biotechnology Holdings or generate 5.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lixte Biotechnology Holdings vs. Benitec Biopharma Ltd
Performance |
| Timeline |
| Lixte Biotechnology |
| Benitec Biopharma |
Lixte Biotechnology and Benitec Biopharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lixte Biotechnology and Benitec Biopharma
The main advantage of trading using opposite Lixte Biotechnology and Benitec Biopharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lixte Biotechnology position performs unexpectedly, Benitec Biopharma 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 Benitec Biopharma will offset losses from the drop in Benitec Biopharma's long position.| Lixte Biotechnology vs. Allarity Therapeutics | Lixte Biotechnology vs. Neurobo Pharmaceuticals | Lixte Biotechnology vs. Virax Biolabs Group | Lixte Biotechnology vs. Quoin Pharmaceuticals Ltd |
| Benitec Biopharma vs. Bio Path Holdings | Benitec Biopharma vs. Capricor Therapeutics | Benitec Biopharma vs. NextCure | Benitec Biopharma vs. Aileron 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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