Correlation Between Synmosa Biopharma and Lotus Pharmaceutical

Can any of the company-specific risk be diversified away by investing in both Synmosa Biopharma and Lotus Pharmaceutical 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 Synmosa Biopharma and Lotus Pharmaceutical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Synmosa Biopharma and Lotus Pharmaceutical Co, you can compare the effects of market volatilities on Synmosa Biopharma and Lotus Pharmaceutical 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 Synmosa Biopharma with a short position of Lotus Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synmosa Biopharma and Lotus Pharmaceutical.

Diversification Opportunities for Synmosa Biopharma and Lotus Pharmaceutical

0.0

Correlation Coefficient

Synmosa Biopharma  Lotus Pharmaceutical

Pay attention - limited upside

The 3 months correlation between Synmosa and Lotus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Synmosa Biopharma and Lotus Pharmaceutical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus Pharmaceutical and Synmosa Biopharma 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 Synmosa Biopharma are associated (or correlated) with Lotus Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus Pharmaceutical has no effect on the direction of Synmosa Biopharma i.e., Synmosa Biopharma and Lotus Pharmaceutical go up and down completely randomly.

Pair Corralation between Synmosa Biopharma and Lotus Pharmaceutical

If you would invest  3,466  in Synmosa Biopharma on October 13, 2024 and sell it today you would lose (26.00) from holding Synmosa Biopharma or give up 0.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Synmosa Biopharma  vs.  Lotus Pharmaceutical Co

Synmosa Biopharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Synmosa Biopharma has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Lotus Pharmaceutical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lotus Pharmaceutical Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Lotus Pharmaceutical is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Synmosa Biopharma and Lotus Pharmaceutical

The main advantage of trading using opposite Synmosa Biopharma and Lotus Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synmosa Biopharma position performs unexpectedly, Lotus Pharmaceutical 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 Lotus Pharmaceutical will offset losses from the drop in Lotus Pharmaceutical's long position.

The idea behind Synmosa Biopharma and Lotus Pharmaceutical Co 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.

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.