Correlation Between Leap Therapeutics and Histogen
Can any of the company-specific risk be diversified away by investing in both Leap Therapeutics and Histogen 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 Leap Therapeutics and Histogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leap Therapeutics and Histogen, you can compare the effects of market volatilities on Leap Therapeutics and Histogen 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 Leap Therapeutics with a short position of Histogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leap Therapeutics and Histogen.
Diversification Opportunities for Leap Therapeutics and Histogen
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Leap and Histogen is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Leap Therapeutics and Histogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Histogen and Leap Therapeutics 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 Leap Therapeutics are associated (or correlated) with Histogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Histogen has no effect on the direction of Leap Therapeutics i.e., Leap Therapeutics and Histogen go up and down completely randomly.
Pair Corralation between Leap Therapeutics and Histogen
Given the investment horizon of 90 days Leap Therapeutics is expected to under-perform the Histogen. In addition to that, Leap Therapeutics is 3.77 times more volatile than Histogen. It trades about -0.4 of its total potential returns per unit of risk. Histogen is currently generating about 0.12 per unit of volatility. If you would invest 2.50 in Histogen on November 4, 2024 and sell it today you would earn a total of 0.20 from holding Histogen or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 89.47% |
| Values | Daily Returns |
Leap Therapeutics vs. Histogen
Performance |
| Timeline |
| Leap Therapeutics |
| Histogen |
Leap Therapeutics and Histogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leap Therapeutics and Histogen
The main advantage of trading using opposite Leap Therapeutics and Histogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leap Therapeutics position performs unexpectedly, Histogen 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 Histogen will offset losses from the drop in Histogen's long position.| Leap Therapeutics vs. X4 Pharmaceuticals | Leap Therapeutics vs. Terns Pharmaceuticals | Leap Therapeutics vs. Day One Biopharmaceuticals | Leap Therapeutics vs. PDS Biotechnology Corp |
| Histogen vs. Virax Biolabs Group | Histogen vs. Artelo Biosciences | Histogen vs. Curis Inc | Histogen vs. SAB Biotherapeutics |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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