Correlation Between Lantern Pharma and Fennec Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Lantern Pharma and Fennec Pharmaceuticals 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 Fennec Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lantern Pharma and Fennec Pharmaceuticals, you can compare the effects of market volatilities on Lantern Pharma and Fennec Pharmaceuticals 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 Fennec Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lantern Pharma and Fennec Pharmaceuticals.
Diversification Opportunities for Lantern Pharma and Fennec Pharmaceuticals
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lantern and Fennec is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Lantern Pharma and Fennec Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fennec Pharmaceuticals 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 Fennec Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fennec Pharmaceuticals has no effect on the direction of Lantern Pharma i.e., Lantern Pharma and Fennec Pharmaceuticals go up and down completely randomly.
Pair Corralation between Lantern Pharma and Fennec Pharmaceuticals
Given the investment horizon of 90 days Lantern Pharma is expected to under-perform the Fennec Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Lantern Pharma is 1.17 times less risky than Fennec Pharmaceuticals. The stock trades about -0.14 of its potential returns per unit of risk. The Fennec Pharmaceuticals is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 473.00 in Fennec Pharmaceuticals on August 29, 2024 and sell it today you would earn a total of 131.00 from holding Fennec Pharmaceuticals or generate 27.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lantern Pharma vs. Fennec Pharmaceuticals
Performance |
| Timeline |
| Lantern Pharma |
| Fennec Pharmaceuticals |
Lantern Pharma and Fennec Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lantern Pharma and Fennec Pharmaceuticals
The main advantage of trading using opposite Lantern Pharma and Fennec Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lantern Pharma position performs unexpectedly, Fennec Pharmaceuticals 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 Fennec Pharmaceuticals will offset losses from the drop in Fennec Pharmaceuticals' long position.| Lantern Pharma vs. Tff Pharmaceuticals | Lantern Pharma vs. Generation Bio Co | Lantern Pharma vs. Lyra Therapeutics | Lantern Pharma vs. Immunome |
| Fennec Pharmaceuticals vs. Eliem Therapeutics | Fennec Pharmaceuticals vs. Scpharmaceuticals | Fennec Pharmaceuticals vs. Milestone Pharmaceuticals | Fennec Pharmaceuticals vs. Seres Therapeutics |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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