Correlation Between Lixte Biotechnology and Entera Bio
Can any of the company-specific risk be diversified away by investing in both Lixte Biotechnology and Entera 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 Lixte Biotechnology and Entera Bio 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 Entera Bio, you can compare the effects of market volatilities on Lixte Biotechnology and Entera 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 Lixte Biotechnology with a short position of Entera Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lixte Biotechnology and Entera Bio.
Diversification Opportunities for Lixte Biotechnology and Entera Bio
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lixte and Entera is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Lixte Biotechnology Holdings and Entera Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entera Bio 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 Entera Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entera Bio has no effect on the direction of Lixte Biotechnology i.e., Lixte Biotechnology and Entera Bio go up and down completely randomly.
Pair Corralation between Lixte Biotechnology and Entera Bio
If you would invest 3.20 in Lixte Biotechnology Holdings on August 28, 2024 and sell it today you would lose (0.41) from holding Lixte Biotechnology Holdings or give up 12.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Lixte Biotechnology Holdings vs. Entera Bio
Performance |
| Timeline |
| Lixte Biotechnology |
| Entera Bio |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lixte Biotechnology and Entera Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lixte Biotechnology and Entera Bio
The main advantage of trading using opposite Lixte Biotechnology and Entera Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lixte Biotechnology position performs unexpectedly, Entera 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 Entera Bio will offset losses from the drop in Entera Bio's long position.| Lixte Biotechnology vs. Reviva Pharmaceuticals Holdings | Lixte Biotechnology vs. CannBioRx Life Sciences |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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