Correlation Between OmniAb and Lumos Pharma
Can any of the company-specific risk be diversified away by investing in both OmniAb and Lumos 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 OmniAb and Lumos Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OmniAb Inc and Lumos Pharma, you can compare the effects of market volatilities on OmniAb and Lumos 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 OmniAb with a short position of Lumos Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of OmniAb and Lumos Pharma.
Diversification Opportunities for OmniAb and Lumos Pharma
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between OmniAb and Lumos is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding OmniAb Inc and Lumos Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumos Pharma and OmniAb 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 OmniAb Inc are associated (or correlated) with Lumos Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lumos Pharma has no effect on the direction of OmniAb i.e., OmniAb and Lumos Pharma go up and down completely randomly.
Pair Corralation between OmniAb and Lumos Pharma
Assuming the 90 days horizon OmniAb Inc is expected to generate 21.72 times more return on investment than Lumos Pharma. However, OmniAb is 21.72 times more volatile than Lumos Pharma. It trades about 0.1 of its potential returns per unit of risk. Lumos Pharma is currently generating about 0.02 per unit of risk. If you would invest 41.00 in OmniAb Inc on August 29, 2024 and sell it today you would lose (7.00) from holding OmniAb Inc or give up 17.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 76.21% |
| Values | Daily Returns |
OmniAb Inc vs. Lumos Pharma
Performance |
| Timeline |
| OmniAb Inc |
| Lumos Pharma |
OmniAb and Lumos Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OmniAb and Lumos Pharma
The main advantage of trading using opposite OmniAb and Lumos Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OmniAb position performs unexpectedly, Lumos 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 Lumos Pharma will offset losses from the drop in Lumos Pharma's long position.| OmniAb vs. MI Homes | OmniAb vs. PepsiCo | OmniAb vs. Willamette Valley Vineyards | OmniAb vs. Keurig Dr Pepper |
| Lumos Pharma vs. Shattuck Labs | Lumos Pharma vs. Eliem Therapeutics | Lumos Pharma vs. Champions Oncology | Lumos Pharma vs. Century 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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