Correlation Between NLS Pharmaceutics and Lixte Biotechnology
Can any of the company-specific risk be diversified away by investing in both NLS Pharmaceutics and Lixte Biotechnology 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 NLS Pharmaceutics and Lixte Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NLS Pharmaceutics AG and Lixte Biotechnology Holdings, you can compare the effects of market volatilities on NLS Pharmaceutics and Lixte Biotechnology 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 NLS Pharmaceutics with a short position of Lixte Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of NLS Pharmaceutics and Lixte Biotechnology.
Diversification Opportunities for NLS Pharmaceutics and Lixte Biotechnology
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between NLS and Lixte is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding NLS Pharmaceutics AG and Lixte Biotechnology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lixte Biotechnology and NLS Pharmaceutics 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 NLS Pharmaceutics AG are associated (or correlated) with Lixte Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lixte Biotechnology has no effect on the direction of NLS Pharmaceutics i.e., NLS Pharmaceutics and Lixte Biotechnology go up and down completely randomly.
Pair Corralation between NLS Pharmaceutics and Lixte Biotechnology
Given the investment horizon of 90 days NLS Pharmaceutics AG is expected to under-perform the Lixte Biotechnology. But the stock apears to be less risky and, when comparing its historical volatility, NLS Pharmaceutics AG is 1.94 times less risky than Lixte Biotechnology. The stock trades about -0.04 of its potential returns per unit of risk. The Lixte Biotechnology Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Lixte Biotechnology Holdings on November 27, 2024 and sell it today you would lose (7.20) from holding Lixte Biotechnology Holdings or give up 65.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NLS Pharmaceutics AG vs. Lixte Biotechnology Holdings
Performance |
| Timeline |
| NLS Pharmaceutics |
| Lixte Biotechnology |
NLS Pharmaceutics and Lixte Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NLS Pharmaceutics and Lixte Biotechnology
The main advantage of trading using opposite NLS Pharmaceutics and Lixte Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NLS Pharmaceutics position performs unexpectedly, Lixte Biotechnology 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 Lixte Biotechnology will offset losses from the drop in Lixte Biotechnology's long position.| NLS Pharmaceutics vs. Indaptus Therapeutics | NLS Pharmaceutics vs. Pasithea Therapeutics Corp | NLS Pharmaceutics vs. Quoin Pharmaceuticals Ltd | NLS Pharmaceutics vs. Lixte Biotechnology Holdings |
| Lixte Biotechnology vs. Reviva Pharmaceuticals Holdings | Lixte Biotechnology vs. CannBioRx Life 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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