Correlation Between Ladenburg Thalmann and Fortress Biotech
Can any of the company-specific risk be diversified away by investing in both Ladenburg Thalmann and Fortress Biotech 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 Ladenburg Thalmann and Fortress Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ladenburg Thalmann Financial and Fortress Biotech Pref, you can compare the effects of market volatilities on Ladenburg Thalmann and Fortress Biotech 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 Ladenburg Thalmann with a short position of Fortress Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ladenburg Thalmann and Fortress Biotech.
Diversification Opportunities for Ladenburg Thalmann and Fortress Biotech
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ladenburg and Fortress is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Ladenburg Thalmann Financial and Fortress Biotech Pref in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortress Biotech Pref and Ladenburg Thalmann 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 Ladenburg Thalmann Financial are associated (or correlated) with Fortress Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortress Biotech Pref has no effect on the direction of Ladenburg Thalmann i.e., Ladenburg Thalmann and Fortress Biotech go up and down completely randomly.
Pair Corralation between Ladenburg Thalmann and Fortress Biotech
Given the investment horizon of 90 days Ladenburg Thalmann Financial is expected to generate 0.88 times more return on investment than Fortress Biotech. However, Ladenburg Thalmann Financial is 1.14 times less risky than Fortress Biotech. It trades about 0.02 of its potential returns per unit of risk. Fortress Biotech Pref is currently generating about -0.01 per unit of risk. If you would invest 1,750 in Ladenburg Thalmann Financial on October 7, 2024 and sell it today you would lose (40.00) from holding Ladenburg Thalmann Financial or give up 2.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 26.41% |
| Values | Daily Returns |
Ladenburg Thalmann Financial vs. Fortress Biotech Pref
Performance |
| Timeline |
| Ladenburg Thalmann |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Fortress Biotech Pref |
Ladenburg Thalmann and Fortress Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ladenburg Thalmann and Fortress Biotech
The main advantage of trading using opposite Ladenburg Thalmann and Fortress Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ladenburg Thalmann position performs unexpectedly, Fortress Biotech 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 Fortress Biotech will offset losses from the drop in Fortress Biotech's long position.The idea behind Ladenburg Thalmann Financial and Fortress Biotech Pref pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Fortress Biotech vs. Checkpoint Therapeutics | Fortress Biotech vs. Mustang Bio | Fortress Biotech vs. Reviva Pharmaceuticals Holdings | Fortress Biotech 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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