Correlation Between NYSE Composite and Lixte Biotechnology
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Lixte Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Lixte Biotechnology Holdings, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Lixte Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Lixte Biotechnology.
Diversification Opportunities for NYSE Composite and Lixte Biotechnology
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Lixte is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Lixte Biotechnology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lixte Biotechnology 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 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 NYSE Composite i.e., NYSE Composite and Lixte Biotechnology go up and down completely randomly.
Pair Corralation between NYSE Composite and Lixte Biotechnology
Assuming the 90 days trading horizon NYSE Composite is expected to generate 7.6 times less return on investment than Lixte Biotechnology. But when comparing it to its historical volatility, NYSE Composite is 15.17 times less risky than Lixte Biotechnology. It trades about 0.15 of its potential returns per unit of risk. Lixte Biotechnology Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 165.00 in Lixte Biotechnology Holdings on August 28, 2024 and sell it today you would earn a total of 41.00 from holding Lixte Biotechnology Holdings or generate 24.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Lixte Biotechnology Holdings
Performance |
| Timeline |
NYSE Composite and Lixte Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Lixte Biotechnology Holdings
Pair trading matchups for Lixte Biotechnology
Pair Trading with NYSE Composite and Lixte Biotechnology
The main advantage of trading using opposite NYSE Composite and Lixte Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Vita Coco | NYSE Composite vs. Franklin Wireless Corp | NYSE Composite vs. Ambev SA ADR | NYSE Composite vs. Toro Co |
| Lixte Biotechnology vs. Eliem Therapeutics | Lixte Biotechnology vs. Scpharmaceuticals | Lixte Biotechnology vs. Milestone Pharmaceuticals | Lixte Biotechnology vs. Seres 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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