Correlation Between Olema Pharmaceuticals and Lineage Cell
Can any of the company-specific risk be diversified away by investing in both Olema Pharmaceuticals and Lineage Cell 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 Olema Pharmaceuticals and Lineage Cell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Olema Pharmaceuticals and Lineage Cell Therapeutics, you can compare the effects of market volatilities on Olema Pharmaceuticals and Lineage Cell 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 Olema Pharmaceuticals with a short position of Lineage Cell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olema Pharmaceuticals and Lineage Cell.
Diversification Opportunities for Olema Pharmaceuticals and Lineage Cell
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Olema and Lineage is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Olema Pharmaceuticals and Lineage Cell Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lineage Cell Therapeutics and Olema 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 Olema Pharmaceuticals are associated (or correlated) with Lineage Cell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lineage Cell Therapeutics has no effect on the direction of Olema Pharmaceuticals i.e., Olema Pharmaceuticals and Lineage Cell go up and down completely randomly.
Pair Corralation between Olema Pharmaceuticals and Lineage Cell
Given the investment horizon of 90 days Olema Pharmaceuticals is expected to under-perform the Lineage Cell. But the stock apears to be less risky and, when comparing its historical volatility, Olema Pharmaceuticals is 1.22 times less risky than Lineage Cell. The stock trades about -0.16 of its potential returns per unit of risk. The Lineage Cell Therapeutics is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 84.00 in Lineage Cell Therapeutics on October 25, 2024 and sell it today you would lose (21.00) from holding Lineage Cell Therapeutics or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Olema Pharmaceuticals vs. Lineage Cell Therapeutics
Performance |
| Timeline |
| Olema Pharmaceuticals |
| Lineage Cell Therapeutics |
Olema Pharmaceuticals and Lineage Cell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Olema Pharmaceuticals and Lineage Cell
The main advantage of trading using opposite Olema Pharmaceuticals and Lineage Cell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Olema Pharmaceuticals position performs unexpectedly, Lineage Cell 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 Lineage Cell will offset losses from the drop in Lineage Cell's long position.| Olema Pharmaceuticals vs. Sana Biotechnology | Olema Pharmaceuticals vs. Cullinan Oncology LLC | Olema Pharmaceuticals vs. Zentalis Pharmaceuticals Llc | Olema Pharmaceuticals vs. Molecular Partners AG |
| Lineage Cell vs. MAIA Biotechnology | Lineage Cell vs. Armata Pharmaceuticals | Lineage Cell vs. Portage Biotech | Lineage Cell vs. Cadrenal Therapeutics, Common |
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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