Correlation Between NewAmsterdam Pharma and Lantern Pharma
Can any of the company-specific risk be diversified away by investing in both NewAmsterdam Pharma and Lantern Pharma 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 NewAmsterdam Pharma and Lantern Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NewAmsterdam Pharma and Lantern Pharma, you can compare the effects of market volatilities on NewAmsterdam Pharma and Lantern Pharma 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 NewAmsterdam Pharma with a short position of Lantern Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of NewAmsterdam Pharma and Lantern Pharma.
Diversification Opportunities for NewAmsterdam Pharma and Lantern Pharma
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NewAmsterdam and Lantern is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding NewAmsterdam Pharma and Lantern Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lantern Pharma and NewAmsterdam 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 NewAmsterdam Pharma are associated (or correlated) with Lantern Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lantern Pharma has no effect on the direction of NewAmsterdam Pharma i.e., NewAmsterdam Pharma and Lantern Pharma go up and down completely randomly.
Pair Corralation between NewAmsterdam Pharma and Lantern Pharma
Given the investment horizon of 90 days NewAmsterdam Pharma is expected to generate 1.14 times more return on investment than Lantern Pharma. However, NewAmsterdam Pharma is 1.14 times more volatile than Lantern Pharma. It trades about 0.16 of its potential returns per unit of risk. Lantern Pharma is currently generating about 0.05 per unit of risk. If you would invest 1,702 in NewAmsterdam Pharma on September 1, 2024 and sell it today you would earn a total of 283.00 from holding NewAmsterdam Pharma or generate 16.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NewAmsterdam Pharma vs. Lantern Pharma
Performance |
| Timeline |
| NewAmsterdam Pharma |
| Lantern Pharma |
NewAmsterdam Pharma and Lantern Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NewAmsterdam Pharma and Lantern Pharma
The main advantage of trading using opposite NewAmsterdam Pharma and Lantern Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NewAmsterdam Pharma position performs unexpectedly, Lantern Pharma 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 Lantern Pharma will offset losses from the drop in Lantern Pharma's long position.| NewAmsterdam Pharma vs. Monte Rosa Therapeutics | NewAmsterdam Pharma vs. Inventiva Sa | NewAmsterdam Pharma vs. Cullinan Oncology LLC | NewAmsterdam Pharma vs. Compass Therapeutics |
| Lantern Pharma vs. Tff Pharmaceuticals | Lantern Pharma vs. Eliem Therapeutics | Lantern Pharma vs. Inhibrx | Lantern Pharma vs. Enliven Therapeutics |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |