Correlation Between Lumos Pharma and Bionomics
Can any of the company-specific risk be diversified away by investing in both Lumos Pharma and Bionomics 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 Lumos Pharma and Bionomics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lumos Pharma and Bionomics Ltd ADR, you can compare the effects of market volatilities on Lumos Pharma and Bionomics 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 Lumos Pharma with a short position of Bionomics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumos Pharma and Bionomics.
Diversification Opportunities for Lumos Pharma and Bionomics
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lumos and Bionomics is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Lumos Pharma and Bionomics Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bionomics ADR and Lumos 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 Lumos Pharma are associated (or correlated) with Bionomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bionomics ADR has no effect on the direction of Lumos Pharma i.e., Lumos Pharma and Bionomics go up and down completely randomly.
Pair Corralation between Lumos Pharma and Bionomics
Given the investment horizon of 90 days Lumos Pharma is expected to generate 0.31 times more return on investment than Bionomics. However, Lumos Pharma is 3.19 times less risky than Bionomics. It trades about 0.12 of its potential returns per unit of risk. Bionomics Ltd ADR is currently generating about 0.01 per unit of risk. If you would invest 225.00 in Lumos Pharma on August 29, 2024 and sell it today you would earn a total of 205.00 from holding Lumos Pharma or generate 91.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lumos Pharma vs. Bionomics Ltd ADR
Performance |
| Timeline |
| Lumos Pharma |
| Bionomics ADR |
Lumos Pharma and Bionomics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumos Pharma and Bionomics
The main advantage of trading using opposite Lumos Pharma and Bionomics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumos Pharma position performs unexpectedly, Bionomics 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 Bionomics will offset losses from the drop in Bionomics' long position.| Lumos Pharma vs. Shattuck Labs | Lumos Pharma vs. Eliem Therapeutics | Lumos Pharma vs. Champions Oncology | Lumos Pharma vs. Century Therapeutics |
| Bionomics vs. Accustem Sciences | Bionomics vs. Scisparc | Bionomics vs. Anebulo Pharmaceuticals | Bionomics vs. Pmv Pharmaceuticals |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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