Correlation Between Lantern Pharma and Star Equity
Can any of the company-specific risk be diversified away by investing in both Lantern Pharma and Star Equity 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 Star Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lantern Pharma and Star Equity Holdings, you can compare the effects of market volatilities on Lantern Pharma and Star Equity 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 Star Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lantern Pharma and Star Equity.
Diversification Opportunities for Lantern Pharma and Star Equity
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lantern and Star is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Lantern Pharma and Star Equity Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Equity Holdings 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 Star Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Equity Holdings has no effect on the direction of Lantern Pharma i.e., Lantern Pharma and Star Equity go up and down completely randomly.
Pair Corralation between Lantern Pharma and Star Equity
Given the investment horizon of 90 days Lantern Pharma is expected to generate 1.54 times more return on investment than Star Equity. However, Lantern Pharma is 1.54 times more volatile than Star Equity Holdings. It trades about -0.04 of its potential returns per unit of risk. Star Equity Holdings is currently generating about -0.29 per unit of risk. If you would invest 360.00 in Lantern Pharma on September 3, 2024 and sell it today you would lose (39.00) from holding Lantern Pharma or give up 10.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lantern Pharma vs. Star Equity Holdings
Performance |
| Timeline |
| Lantern Pharma |
| Star Equity Holdings |
Lantern Pharma and Star Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lantern Pharma and Star Equity
The main advantage of trading using opposite Lantern Pharma and Star Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lantern Pharma position performs unexpectedly, Star Equity 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 Star Equity will offset losses from the drop in Star Equity's long position.| Lantern Pharma vs. Tff Pharmaceuticals | Lantern Pharma vs. Generation Bio Co | Lantern Pharma vs. Lyra Therapeutics | Lantern Pharma vs. Immunome |
| Star Equity vs. Volitionrx | Star Equity vs. Biodesix | Star Equity vs. Fonar | Star Equity vs. Burning Rock Biotech |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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