Correlation Between Zura Bio and Lantern Pharma
Can any of the company-specific risk be diversified away by investing in both Zura Bio 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 Zura Bio and Lantern Pharma 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 Lantern Pharma, you can compare the effects of market volatilities on Zura Bio 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 Zura Bio with a short position of Lantern Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zura Bio and Lantern Pharma.
Diversification Opportunities for Zura Bio and Lantern Pharma
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Zura and Lantern is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Zura Bio Limited and Lantern Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lantern Pharma 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 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 Zura Bio i.e., Zura Bio and Lantern Pharma go up and down completely randomly.
Pair Corralation between Zura Bio and Lantern Pharma
Given the investment horizon of 90 days Zura Bio Limited is expected to generate 3.03 times more return on investment than Lantern Pharma. However, Zura Bio is 3.03 times more volatile than Lantern Pharma. It trades about 0.02 of its potential returns per unit of risk. Lantern Pharma is currently generating about 0.01 per unit of risk. If you would invest 816.00 in Zura Bio Limited on August 25, 2024 and sell it today you would lose (543.00) from holding Zura Bio Limited or give up 66.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 85.71% |
| Values | Daily Returns |
Zura Bio Limited vs. Lantern Pharma
Performance |
| Timeline |
| Zura Bio Limited |
| Lantern Pharma |
Zura Bio and Lantern Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zura Bio and Lantern Pharma
The main advantage of trading using opposite Zura Bio and Lantern Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zura Bio 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.| Zura Bio vs. Lipocine | Zura Bio vs. Tritent International Agriculture | Zura Bio vs. Park Ohio Holdings | Zura Bio vs. Nuvalent |
| 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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