Correlation Between Lantern Pharma and Icosavax
Can any of the company-specific risk be diversified away by investing in both Lantern Pharma and Icosavax 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 Icosavax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lantern Pharma and Icosavax, you can compare the effects of market volatilities on Lantern Pharma and Icosavax 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 Icosavax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lantern Pharma and Icosavax.
Diversification Opportunities for Lantern Pharma and Icosavax
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lantern and Icosavax is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Lantern Pharma and Icosavax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icosavax 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 Icosavax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icosavax has no effect on the direction of Lantern Pharma i.e., Lantern Pharma and Icosavax go up and down completely randomly.
Pair Corralation between Lantern Pharma and Icosavax
Given the investment horizon of 90 days Lantern Pharma is expected to generate 21.68 times less return on investment than Icosavax. But when comparing it to its historical volatility, Lantern Pharma is 2.01 times less risky than Icosavax. It trades about 0.01 of its potential returns per unit of risk. Icosavax is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 319.00 in Icosavax on August 25, 2024 and sell it today you would earn a total of 583.00 from holding Icosavax or generate 182.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 31.99% |
| Values | Daily Returns |
Lantern Pharma vs. Icosavax
Performance |
| Timeline |
| Lantern Pharma |
| Icosavax |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lantern Pharma and Icosavax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lantern Pharma and Icosavax
The main advantage of trading using opposite Lantern Pharma and Icosavax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lantern Pharma position performs unexpectedly, Icosavax 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 Icosavax will offset losses from the drop in Icosavax's long position.| Lantern Pharma vs. Tff Pharmaceuticals | Lantern Pharma vs. Generation Bio Co | Lantern Pharma vs. Lyra Therapeutics | Lantern Pharma vs. Immunome |
| Icosavax vs. Terns Pharmaceuticals | Icosavax vs. Amylyx Pharmaceuticals | Icosavax vs. Acumen Pharmaceuticals | Icosavax vs. Inozyme Pharma |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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