Correlation Between Lantheus Holdings and Eisai
Can any of the company-specific risk be diversified away by investing in both Lantheus Holdings and Eisai 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 Eisai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lantheus Holdings and Eisai Co, you can compare the effects of market volatilities on Lantheus Holdings and Eisai 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 Eisai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lantheus Holdings and Eisai.
Diversification Opportunities for Lantheus Holdings and Eisai
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lantheus and Eisai is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Lantheus Holdings and Eisai Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eisai 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 Eisai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eisai has no effect on the direction of Lantheus Holdings i.e., Lantheus Holdings and Eisai go up and down completely randomly.
Pair Corralation between Lantheus Holdings and Eisai
Given the investment horizon of 90 days Lantheus Holdings is expected to under-perform the Eisai. In addition to that, Lantheus Holdings is 1.33 times more volatile than Eisai Co. It trades about -0.35 of its total potential returns per unit of risk. Eisai Co is currently generating about -0.06 per unit of volatility. If you would invest 747.00 in Eisai Co on November 28, 2024 and sell it today you would lose (23.00) from holding Eisai Co or give up 3.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lantheus Holdings vs. Eisai Co
Performance |
| Timeline |
| Lantheus Holdings |
| Eisai |
Lantheus Holdings and Eisai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lantheus Holdings and Eisai
The main advantage of trading using opposite Lantheus Holdings and Eisai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lantheus Holdings position performs unexpectedly, Eisai 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 Eisai will offset losses from the drop in Eisai's long position.| Lantheus Holdings vs. Neurocrine Biosciences | Lantheus Holdings vs. Ironwood Pharmaceuticals | Lantheus Holdings vs. Alkermes Plc | Lantheus Holdings vs. Avadel Pharmaceuticals PLC |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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