Correlation Between Lantern Pharma and Cognition Therapeutics
Can any of the company-specific risk be diversified away by investing in both Lantern Pharma and Cognition Therapeutics 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 Lantern Pharma and Cognition Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lantern Pharma and Cognition Therapeutics, you can compare the effects of market volatilities on Lantern Pharma and Cognition Therapeutics 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 Lantern Pharma with a short position of Cognition Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lantern Pharma and Cognition Therapeutics.
Diversification Opportunities for Lantern Pharma and Cognition Therapeutics
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lantern and Cognition is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Lantern Pharma and Cognition Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognition Therapeutics and Lantern Pharma 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 Lantern Pharma are associated (or correlated) with Cognition Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cognition Therapeutics has no effect on the direction of Lantern Pharma i.e., Lantern Pharma and Cognition Therapeutics go up and down completely randomly.
Pair Corralation between Lantern Pharma and Cognition Therapeutics
Given the investment horizon of 90 days Lantern Pharma is expected to generate 1.02 times more return on investment than Cognition Therapeutics. However, Lantern Pharma is 1.02 times more volatile than Cognition Therapeutics. It trades about 0.01 of its potential returns per unit of risk. Cognition Therapeutics is currently generating about -0.07 per unit of risk. If you would invest 428.00 in Lantern Pharma on August 25, 2024 and sell it today you would lose (120.00) from holding Lantern Pharma or give up 28.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lantern Pharma vs. Cognition Therapeutics
Performance |
| Timeline |
| Lantern Pharma |
| Cognition Therapeutics |
Lantern Pharma and Cognition Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lantern Pharma and Cognition Therapeutics
The main advantage of trading using opposite Lantern Pharma and Cognition Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lantern Pharma position performs unexpectedly, Cognition Therapeutics 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 Cognition Therapeutics will offset losses from the drop in Cognition Therapeutics' long position.| Lantern Pharma vs. Tff Pharmaceuticals | Lantern Pharma vs. Generation Bio Co | Lantern Pharma vs. Lyra Therapeutics | Lantern Pharma vs. Immunome |
| Cognition Therapeutics vs. Reviva Pharmaceuticals Holdings | Cognition Therapeutics vs. Eyenovia | Cognition Therapeutics vs. Transcode Therapeutics | Cognition Therapeutics vs. Kodiak Sciences |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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