Correlation Between Larimar Therapeutics and Longeveron LLC
Can any of the company-specific risk be diversified away by investing in both Larimar Therapeutics and Longeveron LLC 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 Larimar Therapeutics and Longeveron LLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Larimar Therapeutics and Longeveron LLC, you can compare the effects of market volatilities on Larimar Therapeutics and Longeveron LLC 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 Larimar Therapeutics with a short position of Longeveron LLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Larimar Therapeutics and Longeveron LLC.
Diversification Opportunities for Larimar Therapeutics and Longeveron LLC
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Larimar and Longeveron is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Larimar Therapeutics and Longeveron LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longeveron LLC and Larimar 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 Larimar Therapeutics are associated (or correlated) with Longeveron LLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longeveron LLC has no effect on the direction of Larimar Therapeutics i.e., Larimar Therapeutics and Longeveron LLC go up and down completely randomly.
Pair Corralation between Larimar Therapeutics and Longeveron LLC
Given the investment horizon of 90 days Larimar Therapeutics is expected to under-perform the Longeveron LLC. In addition to that, Larimar Therapeutics is 1.88 times more volatile than Longeveron LLC. It trades about -0.11 of its total potential returns per unit of risk. Longeveron LLC is currently generating about -0.06 per unit of volatility. If you would invest 216.00 in Longeveron LLC on September 3, 2024 and sell it today you would lose (11.00) from holding Longeveron LLC or give up 5.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Larimar Therapeutics vs. Longeveron LLC
Performance |
| Timeline |
| Larimar Therapeutics |
| Longeveron LLC |
Larimar Therapeutics and Longeveron LLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Larimar Therapeutics and Longeveron LLC
The main advantage of trading using opposite Larimar Therapeutics and Longeveron LLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Larimar Therapeutics position performs unexpectedly, Longeveron LLC 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 Longeveron LLC will offset losses from the drop in Longeveron LLC's long position.| Larimar Therapeutics vs. DiaMedica Therapeutics | Larimar Therapeutics vs. Lyra Therapeutics | Larimar Therapeutics vs. Centessa Pharmaceuticals PLC |
| Longeveron LLC vs. DiaMedica Therapeutics | Longeveron LLC vs. Lyra Therapeutics | Longeveron LLC vs. Centessa Pharmaceuticals PLC |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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