Correlation Between Lantern Pharma and Edgewise Therapeutics
Can any of the company-specific risk be diversified away by investing in both Lantern Pharma and Edgewise 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 Edgewise 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 Edgewise Therapeutics, you can compare the effects of market volatilities on Lantern Pharma and Edgewise 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 Edgewise Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lantern Pharma and Edgewise Therapeutics.
Diversification Opportunities for Lantern Pharma and Edgewise Therapeutics
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lantern and Edgewise is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Lantern Pharma and Edgewise Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgewise 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 Edgewise Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgewise Therapeutics has no effect on the direction of Lantern Pharma i.e., Lantern Pharma and Edgewise Therapeutics go up and down completely randomly.
Pair Corralation between Lantern Pharma and Edgewise Therapeutics
Given the investment horizon of 90 days Lantern Pharma is expected to generate 1.95 times more return on investment than Edgewise Therapeutics. However, Lantern Pharma is 1.95 times more volatile than Edgewise Therapeutics. It trades about 0.05 of its potential returns per unit of risk. Edgewise Therapeutics is currently generating about -0.02 per unit of risk. If you would invest 313.00 in Lantern Pharma on September 1, 2024 and sell it today you would earn a total of 8.00 from holding Lantern Pharma or generate 2.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lantern Pharma vs. Edgewise Therapeutics
Performance |
| Timeline |
| Lantern Pharma |
| Edgewise Therapeutics |
Lantern Pharma and Edgewise Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lantern Pharma and Edgewise Therapeutics
The main advantage of trading using opposite Lantern Pharma and Edgewise Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lantern Pharma position performs unexpectedly, Edgewise 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 Edgewise Therapeutics will offset losses from the drop in Edgewise Therapeutics' long position.| Lantern Pharma vs. Cue Biopharma | Lantern Pharma vs. Tff Pharmaceuticals | Lantern Pharma vs. Eliem Therapeutics | Lantern Pharma vs. Inhibrx |
| Edgewise Therapeutics vs. Cue Biopharma | Edgewise Therapeutics vs. Tff Pharmaceuticals | Edgewise Therapeutics vs. Eliem Therapeutics | Edgewise Therapeutics vs. Inhibrx |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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