Correlation Between Lumos Pharma and Protagenic Therapeutics
Can any of the company-specific risk be diversified away by investing in both Lumos Pharma and Protagenic Therapeutics 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 Protagenic Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lumos Pharma and Protagenic Therapeutics, you can compare the effects of market volatilities on Lumos Pharma and Protagenic Therapeutics 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 Protagenic Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumos Pharma and Protagenic Therapeutics.
Diversification Opportunities for Lumos Pharma and Protagenic Therapeutics
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lumos and Protagenic is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Lumos Pharma and Protagenic Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protagenic Therapeutics 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 Protagenic Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protagenic Therapeutics has no effect on the direction of Lumos Pharma i.e., Lumos Pharma and Protagenic Therapeutics go up and down completely randomly.
Pair Corralation between Lumos Pharma and Protagenic Therapeutics
Given the investment horizon of 90 days Lumos Pharma is expected to under-perform the Protagenic Therapeutics. But the stock apears to be less risky and, when comparing its historical volatility, Lumos Pharma is 9.24 times less risky than Protagenic Therapeutics. The stock trades about -0.09 of its potential returns per unit of risk. The Protagenic Therapeutics is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 61.00 in Protagenic Therapeutics on August 26, 2024 and sell it today you would earn a total of 4.00 from holding Protagenic Therapeutics or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lumos Pharma vs. Protagenic Therapeutics
Performance |
| Timeline |
| Lumos Pharma |
| Protagenic Therapeutics |
Lumos Pharma and Protagenic Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumos Pharma and Protagenic Therapeutics
The main advantage of trading using opposite Lumos Pharma and Protagenic Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumos Pharma position performs unexpectedly, Protagenic Therapeutics 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 Protagenic Therapeutics will offset losses from the drop in Protagenic Therapeutics' long position.| Lumos Pharma vs. Shattuck Labs | Lumos Pharma vs. Eliem Therapeutics | Lumos Pharma vs. Champions Oncology | Lumos Pharma vs. Century Therapeutics |
| Protagenic Therapeutics vs. Sino Biopharmaceutical Ltd | Protagenic Therapeutics vs. Eledon Pharmaceuticals | Protagenic Therapeutics vs. Rezolute | Protagenic Therapeutics vs. XOMA Corporation |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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