Correlation Between Lixte Biotechnology and NLS Pharmaceutics
Can any of the company-specific risk be diversified away by investing in both Lixte Biotechnology and NLS Pharmaceutics 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 NLS Pharmaceutics 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 NLS Pharmaceutics AG, you can compare the effects of market volatilities on Lixte Biotechnology and NLS Pharmaceutics 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 NLS Pharmaceutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lixte Biotechnology and NLS Pharmaceutics.
Diversification Opportunities for Lixte Biotechnology and NLS Pharmaceutics
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lixte and NLS is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Lixte Biotechnology Holdings and NLS Pharmaceutics AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NLS Pharmaceutics 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 NLS Pharmaceutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NLS Pharmaceutics has no effect on the direction of Lixte Biotechnology i.e., Lixte Biotechnology and NLS Pharmaceutics go up and down completely randomly.
Pair Corralation between Lixte Biotechnology and NLS Pharmaceutics
Assuming the 90 days horizon Lixte Biotechnology is expected to generate 1.94 times less return on investment than NLS Pharmaceutics. But when comparing it to its historical volatility, Lixte Biotechnology Holdings is 1.48 times less risky than NLS Pharmaceutics. It trades about 0.07 of its potential returns per unit of risk. NLS Pharmaceutics AG is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 18.00 in NLS Pharmaceutics AG on November 27, 2024 and sell it today you would lose (16.50) from holding NLS Pharmaceutics AG or give up 91.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lixte Biotechnology Holdings vs. NLS Pharmaceutics AG
Performance |
| Timeline |
| Lixte Biotechnology |
| NLS Pharmaceutics |
Lixte Biotechnology and NLS Pharmaceutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lixte Biotechnology and NLS Pharmaceutics
The main advantage of trading using opposite Lixte Biotechnology and NLS Pharmaceutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lixte Biotechnology position performs unexpectedly, NLS Pharmaceutics 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 NLS Pharmaceutics will offset losses from the drop in NLS Pharmaceutics' long position.| Lixte Biotechnology vs. Reviva Pharmaceuticals Holdings | Lixte Biotechnology vs. CannBioRx Life Sciences |
| NLS Pharmaceutics vs. Reviva Pharmaceuticals Holdings | NLS Pharmaceutics vs. GeoVax Labs | NLS Pharmaceutics vs. NLS Pharmaceutics AG | NLS Pharmaceutics vs. Lixte Biotechnology 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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