Correlation Between NRX Pharmaceuticals and Lexaria Bioscience
Can any of the company-specific risk be diversified away by investing in both NRX Pharmaceuticals and Lexaria Bioscience 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 NRX Pharmaceuticals and Lexaria Bioscience into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NRX Pharmaceuticals and Lexaria Bioscience Corp, you can compare the effects of market volatilities on NRX Pharmaceuticals and Lexaria Bioscience 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 NRX Pharmaceuticals with a short position of Lexaria Bioscience. Check out your portfolio center. Please also check ongoing floating volatility patterns of NRX Pharmaceuticals and Lexaria Bioscience.
Diversification Opportunities for NRX Pharmaceuticals and Lexaria Bioscience
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NRX and Lexaria is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding NRX Pharmaceuticals and Lexaria Bioscience Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lexaria Bioscience Corp and NRX Pharmaceuticals 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 NRX Pharmaceuticals are associated (or correlated) with Lexaria Bioscience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lexaria Bioscience Corp has no effect on the direction of NRX Pharmaceuticals i.e., NRX Pharmaceuticals and Lexaria Bioscience go up and down completely randomly.
Pair Corralation between NRX Pharmaceuticals and Lexaria Bioscience
Given the investment horizon of 90 days NRX Pharmaceuticals is expected to under-perform the Lexaria Bioscience. But the stock apears to be less risky and, when comparing its historical volatility, NRX Pharmaceuticals is 1.18 times less risky than Lexaria Bioscience. The stock trades about -0.16 of its potential returns per unit of risk. The Lexaria Bioscience Corp is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 293.00 in Lexaria Bioscience Corp on September 13, 2024 and sell it today you would lose (68.00) from holding Lexaria Bioscience Corp or give up 23.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NRX Pharmaceuticals vs. Lexaria Bioscience Corp
Performance |
| Timeline |
| NRX Pharmaceuticals |
| Lexaria Bioscience Corp |
NRX Pharmaceuticals and Lexaria Bioscience Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NRX Pharmaceuticals and Lexaria Bioscience
The main advantage of trading using opposite NRX Pharmaceuticals and Lexaria Bioscience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NRX Pharmaceuticals position performs unexpectedly, Lexaria Bioscience 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 Lexaria Bioscience will offset losses from the drop in Lexaria Bioscience's long position.| NRX Pharmaceuticals vs. Biomx Inc | NRX Pharmaceuticals vs. Lexaria Bioscience Corp | NRX Pharmaceuticals vs. Aditxt Inc | NRX Pharmaceuticals vs. Nutriband |
| Lexaria Bioscience vs. Revelation Biosciences | Lexaria Bioscience vs. Zura Bio Limited | Lexaria Bioscience vs. Phio Pharmaceuticals Corp | Lexaria Bioscience vs. ZyVersa 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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