Correlation Between LumiraDx and Sotera Health
Can any of the company-specific risk be diversified away by investing in both LumiraDx and Sotera Health 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 LumiraDx and Sotera Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LumiraDx and Sotera Health Co, you can compare the effects of market volatilities on LumiraDx and Sotera Health 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 LumiraDx with a short position of Sotera Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of LumiraDx and Sotera Health.
Diversification Opportunities for LumiraDx and Sotera Health
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between LumiraDx and Sotera is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding LumiraDx and Sotera Health Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sotera Health and LumiraDx 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 LumiraDx are associated (or correlated) with Sotera Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sotera Health has no effect on the direction of LumiraDx i.e., LumiraDx and Sotera Health go up and down completely randomly.
Pair Corralation between LumiraDx and Sotera Health
If you would invest 42.00 in LumiraDx on August 27, 2024 and sell it today you would earn a total of 0.00 from holding LumiraDx or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
LumiraDx vs. Sotera Health Co
Performance |
| Timeline |
| LumiraDx |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sotera Health |
LumiraDx and Sotera Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LumiraDx and Sotera Health
The main advantage of trading using opposite LumiraDx and Sotera Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LumiraDx position performs unexpectedly, Sotera Health 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 Sotera Health will offset losses from the drop in Sotera Health's long position.| LumiraDx vs. Fonar | LumiraDx vs. Burning Rock Biotech | LumiraDx vs. Sera Prognostics | LumiraDx vs. Exagen Inc |
| Sotera Health vs. Qiagen NV | Sotera Health vs. Aclaris Therapeutics | Sotera Health vs. Neogen | Sotera Health vs. RadNet Inc |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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