Correlation Between Sanofi ADR and Lexaria Bioscience
Can any of the company-specific risk be diversified away by investing in both Sanofi ADR and Lexaria Bioscience 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 Sanofi ADR and Lexaria Bioscience into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sanofi ADR and Lexaria Bioscience Corp, you can compare the effects of market volatilities on Sanofi ADR and Lexaria Bioscience 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 Sanofi ADR with a short position of Lexaria Bioscience. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanofi ADR and Lexaria Bioscience.
Diversification Opportunities for Sanofi ADR and Lexaria Bioscience
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sanofi and Lexaria is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Sanofi ADR and Lexaria Bioscience Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lexaria Bioscience Corp and Sanofi ADR 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 Sanofi ADR are associated (or correlated) with Lexaria Bioscience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lexaria Bioscience Corp has no effect on the direction of Sanofi ADR i.e., Sanofi ADR and Lexaria Bioscience go up and down completely randomly.
Pair Corralation between Sanofi ADR and Lexaria Bioscience
Considering the 90-day investment horizon Sanofi ADR is expected to generate 0.39 times more return on investment than Lexaria Bioscience. However, Sanofi ADR is 2.57 times less risky than Lexaria Bioscience. It trades about 0.43 of its potential returns per unit of risk. Lexaria Bioscience Corp is currently generating about -0.29 per unit of risk. If you would invest 4,815 in Sanofi ADR on November 4, 2024 and sell it today you would earn a total of 619.00 from holding Sanofi ADR or generate 12.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sanofi ADR vs. Lexaria Bioscience Corp
Performance |
| Timeline |
| Sanofi ADR |
| Lexaria Bioscience Corp |
Sanofi ADR and Lexaria Bioscience Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanofi ADR and Lexaria Bioscience
The main advantage of trading using opposite Sanofi ADR and Lexaria Bioscience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanofi ADR position performs unexpectedly, Lexaria Bioscience 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 Lexaria Bioscience will offset losses from the drop in Lexaria Bioscience's long position.| Sanofi ADR vs. AstraZeneca PLC ADR | Sanofi ADR vs. Roche Holding Ltd | Sanofi ADR vs. GlaxoSmithKline PLC ADR | Sanofi ADR vs. Merck Company |
| Lexaria Bioscience vs. Revelation Biosciences | Lexaria Bioscience vs. Zura Bio Limited | Lexaria Bioscience vs. Phio Pharmaceuticals Corp | Lexaria Bioscience vs. ZyVersa 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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