Correlation Between Zura Bio and Lexaria Bioscience
Can any of the company-specific risk be diversified away by investing in both Zura Bio 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 Zura Bio and Lexaria Bioscience into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zura Bio Limited and Lexaria Bioscience Corp, you can compare the effects of market volatilities on Zura Bio 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 Zura Bio with a short position of Lexaria Bioscience. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zura Bio and Lexaria Bioscience.
Diversification Opportunities for Zura Bio and Lexaria Bioscience
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zura and Lexaria is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Zura Bio Limited 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 Zura Bio 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 Zura Bio Limited 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 Zura Bio i.e., Zura Bio and Lexaria Bioscience go up and down completely randomly.
Pair Corralation between Zura Bio and Lexaria Bioscience
Given the investment horizon of 90 days Zura Bio Limited is expected to under-perform the Lexaria Bioscience. In addition to that, Zura Bio is 1.16 times more volatile than Lexaria Bioscience Corp. It trades about -0.35 of its total potential returns per unit of risk. Lexaria Bioscience Corp is currently generating about -0.29 per unit of volatility. If you would invest 229.00 in Lexaria Bioscience Corp on November 4, 2024 and sell it today you would lose (47.00) from holding Lexaria Bioscience Corp or give up 20.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zura Bio Limited vs. Lexaria Bioscience Corp
Performance |
| Timeline |
| Zura Bio Limited |
| Lexaria Bioscience Corp |
Zura Bio and Lexaria Bioscience Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zura Bio and Lexaria Bioscience
The main advantage of trading using opposite Zura Bio and Lexaria Bioscience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zura Bio 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.| Zura Bio vs. LAir Liquide SA | Zura Bio vs. Grupo Aeroportuario del | Zura Bio vs. Marchex | Zura Bio vs. Mesa Air Group |
| 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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