Correlation Between PolyPid and Lantern Pharma
Can any of the company-specific risk be diversified away by investing in both PolyPid and Lantern 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 PolyPid and Lantern Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PolyPid and Lantern Pharma, you can compare the effects of market volatilities on PolyPid and Lantern 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 PolyPid with a short position of Lantern Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of PolyPid and Lantern Pharma.
Diversification Opportunities for PolyPid and Lantern Pharma
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PolyPid and Lantern is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding PolyPid and Lantern Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lantern Pharma and PolyPid 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 PolyPid are associated (or correlated) with Lantern Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lantern Pharma has no effect on the direction of PolyPid i.e., PolyPid and Lantern Pharma go up and down completely randomly.
Pair Corralation between PolyPid and Lantern Pharma
Given the investment horizon of 90 days PolyPid is expected to generate 0.65 times more return on investment than Lantern Pharma. However, PolyPid is 1.54 times less risky than Lantern Pharma. It trades about 0.05 of its potential returns per unit of risk. Lantern Pharma is currently generating about -0.14 per unit of risk. If you would invest 342.00 in PolyPid on August 29, 2024 and sell it today you would earn a total of 9.00 from holding PolyPid or generate 2.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PolyPid vs. Lantern Pharma
Performance |
| Timeline |
| PolyPid |
| Lantern Pharma |
PolyPid and Lantern Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PolyPid and Lantern Pharma
The main advantage of trading using opposite PolyPid and Lantern Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PolyPid position performs unexpectedly, Lantern 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 Lantern Pharma will offset losses from the drop in Lantern Pharma's long position.The idea behind PolyPid and Lantern Pharma pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Lantern Pharma vs. Tff Pharmaceuticals | Lantern Pharma vs. Generation Bio Co | Lantern Pharma vs. Lyra Therapeutics | Lantern Pharma vs. Immunome |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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