Correlation Between Pulmatrix and Longboard Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Pulmatrix and Longboard Pharmaceuticals 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 Pulmatrix and Longboard Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pulmatrix and Longboard Pharmaceuticals, you can compare the effects of market volatilities on Pulmatrix and Longboard Pharmaceuticals 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 Pulmatrix with a short position of Longboard Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pulmatrix and Longboard Pharmaceuticals.
Diversification Opportunities for Pulmatrix and Longboard Pharmaceuticals
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pulmatrix and Longboard is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Pulmatrix and Longboard Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longboard Pharmaceuticals and Pulmatrix 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 Pulmatrix are associated (or correlated) with Longboard Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longboard Pharmaceuticals has no effect on the direction of Pulmatrix i.e., Pulmatrix and Longboard Pharmaceuticals go up and down completely randomly.
Pair Corralation between Pulmatrix and Longboard Pharmaceuticals
Given the investment horizon of 90 days Pulmatrix is expected to generate 3.07 times less return on investment than Longboard Pharmaceuticals. But when comparing it to its historical volatility, Pulmatrix is 3.01 times less risky than Longboard Pharmaceuticals. It trades about 0.07 of its potential returns per unit of risk. Longboard Pharmaceuticals is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 745.00 in Longboard Pharmaceuticals on September 1, 2024 and sell it today you would earn a total of 5,253 from holding Longboard Pharmaceuticals or generate 705.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pulmatrix vs. Longboard Pharmaceuticals
Performance |
| Timeline |
| Pulmatrix |
| Longboard Pharmaceuticals |
Pulmatrix and Longboard Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pulmatrix and Longboard Pharmaceuticals
The main advantage of trading using opposite Pulmatrix and Longboard Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pulmatrix position performs unexpectedly, Longboard Pharmaceuticals 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 Longboard Pharmaceuticals will offset losses from the drop in Longboard Pharmaceuticals' long position.| Pulmatrix vs. Capricor Therapeutics | Pulmatrix vs. Akari Therapeutics PLC | Pulmatrix vs. Soleno Therapeutics | Pulmatrix vs. Bio Path Holdings |
| Longboard Pharmaceuticals vs. Molecular Partners AG | Longboard Pharmaceuticals vs. MediciNova | Longboard Pharmaceuticals vs. Anebulo Pharmaceuticals | Longboard Pharmaceuticals vs. Champions Oncology |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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