Correlation Between NYSE Composite and Lexaria Bioscience
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Lexaria Bioscience into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Lexaria Bioscience Corp, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Lexaria Bioscience. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Lexaria Bioscience.
Diversification Opportunities for NYSE Composite and Lexaria Bioscience
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Lexaria is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Lexaria Bioscience go up and down completely randomly.
Pair Corralation between NYSE Composite and Lexaria Bioscience
Assuming the 90 days trading horizon NYSE Composite is expected to generate 4.36 times less return on investment than Lexaria Bioscience. But when comparing it to its historical volatility, NYSE Composite is 15.75 times less risky than Lexaria Bioscience. It trades about 0.42 of its potential returns per unit of risk. Lexaria Bioscience Corp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 70.00 in Lexaria Bioscience Corp on September 1, 2024 and sell it today you would earn a total of 10.00 from holding Lexaria Bioscience Corp or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
NYSE Composite vs. Lexaria Bioscience Corp
Performance |
| Timeline |
NYSE Composite and Lexaria Bioscience Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Lexaria Bioscience Corp
Pair trading matchups for Lexaria Bioscience
Pair Trading with NYSE Composite and Lexaria Bioscience
The main advantage of trading using opposite NYSE Composite and Lexaria Bioscience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Lexaria Bioscience vs. Lexaria Bioscience Corp | Lexaria Bioscience vs. Lixte Biotechnology Holdings | Lexaria Bioscience vs. GeoVax Labs | Lexaria Bioscience vs. Reviva Pharmaceuticals Holdings |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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