Correlation Between Lantheus Holdings and Clearfield
Can any of the company-specific risk be diversified away by investing in both Lantheus Holdings and Clearfield 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 Lantheus Holdings and Clearfield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lantheus Holdings and Clearfield, you can compare the effects of market volatilities on Lantheus Holdings and Clearfield 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 Lantheus Holdings with a short position of Clearfield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lantheus Holdings and Clearfield.
Diversification Opportunities for Lantheus Holdings and Clearfield
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lantheus and Clearfield is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Lantheus Holdings and Clearfield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearfield and Lantheus Holdings 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 Lantheus Holdings are associated (or correlated) with Clearfield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearfield has no effect on the direction of Lantheus Holdings i.e., Lantheus Holdings and Clearfield go up and down completely randomly.
Pair Corralation between Lantheus Holdings and Clearfield
Given the investment horizon of 90 days Lantheus Holdings is expected to generate 1.79 times more return on investment than Clearfield. However, Lantheus Holdings is 1.79 times more volatile than Clearfield. It trades about -0.13 of its potential returns per unit of risk. Clearfield is currently generating about -0.28 per unit of risk. If you would invest 11,010 in Lantheus Holdings on August 27, 2024 and sell it today you would lose (1,914) from holding Lantheus Holdings or give up 17.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lantheus Holdings vs. Clearfield
Performance |
| Timeline |
| Lantheus Holdings |
| Clearfield |
Lantheus Holdings and Clearfield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lantheus Holdings and Clearfield
The main advantage of trading using opposite Lantheus Holdings and Clearfield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lantheus Holdings position performs unexpectedly, Clearfield 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 Clearfield will offset losses from the drop in Clearfield's long position.| Lantheus Holdings vs. Neurocrine Biosciences | Lantheus Holdings vs. Ironwood Pharmaceuticals | Lantheus Holdings vs. Alkermes Plc | Lantheus Holdings vs. Avadel Pharmaceuticals PLC |
| Clearfield vs. Ichor Holdings | Clearfield vs. Fabrinet | Clearfield vs. Hello Group | Clearfield vs. Ultra Clean 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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