Correlation Between Artelo Biosciences and Lixte Biotechnology

Can any of the company-specific risk be diversified away by investing in both Artelo Biosciences and Lixte Biotechnology 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 Artelo Biosciences and Lixte Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Artelo Biosciences and Lixte Biotechnology Holdings, you can compare the effects of market volatilities on Artelo Biosciences and Lixte Biotechnology 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 Artelo Biosciences with a short position of Lixte Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artelo Biosciences and Lixte Biotechnology.

Diversification Opportunities for Artelo Biosciences and Lixte Biotechnology

0.0

Correlation Coefficient

Artelo Biosciences  Lixte Biotechnology

Pay attention - limited upside

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

Pair Corralation between Artelo Biosciences and Lixte Biotechnology

If you would invest  2.80  in Lixte Biotechnology Holdings on November 29, 2024 and sell it today you would earn a total of  2.17  from holding Lixte Biotechnology Holdings or generate 77.5% return on investment over 90 days.

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

Artelo Biosciences  vs.  Lixte Biotechnology Holdings

Artelo Biosciences

Risk-Adjusted Performance

Very Weak

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

Lixte Biotechnology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lixte Biotechnology Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Lixte Biotechnology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Artelo Biosciences and Lixte Biotechnology

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

The idea behind Artelo Biosciences and Lixte Biotechnology Holdings 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.

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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.