Correlation Between Assertio Therapeutics and Lifecore Biomedical

Can any of the company-specific risk be diversified away by investing in both Assertio Therapeutics and Lifecore Biomedical 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 Assertio Therapeutics and Lifecore Biomedical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Assertio Therapeutics and Lifecore Biomedical, you can compare the effects of market volatilities on Assertio Therapeutics and Lifecore Biomedical 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 Assertio Therapeutics with a short position of Lifecore Biomedical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Assertio Therapeutics and Lifecore Biomedical.

Diversification Opportunities for Assertio Therapeutics and Lifecore Biomedical

-0.74

Correlation Coefficient

Assertio Therapeutics  Lifecore Biomedical

Pay attention - limited upside

The 3 months correlation between Assertio and Lifecore is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Assertio Therapeutics and Lifecore Biomedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifecore Biomedical and Assertio Therapeutics 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 Assertio Therapeutics are associated (or correlated) with Lifecore Biomedical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifecore Biomedical has no effect on the direction of Assertio Therapeutics i.e., Assertio Therapeutics and Lifecore Biomedical go up and down completely randomly.

Pair Corralation between Assertio Therapeutics and Lifecore Biomedical

Given the investment horizon of 90 days Assertio Therapeutics is expected to under-perform the Lifecore Biomedical. In addition to that, Assertio Therapeutics is 1.04 times more volatile than Lifecore Biomedical. It trades about -0.01 of its total potential returns per unit of risk. Lifecore Biomedical is currently generating about 0.21 per unit of volatility. If you would invest  437.00  in Lifecore Biomedical on September 3, 2024 and sell it today you would earn a total of  304.00  from holding Lifecore Biomedical or generate 69.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Assertio Therapeutics  vs.  Lifecore Biomedical

Assertio Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Assertio Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Assertio Therapeutics is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Lifecore Biomedical

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lifecore Biomedical are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting fundamental indicators, Lifecore Biomedical reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Assertio Therapeutics and Lifecore Biomedical

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

The idea behind Assertio Therapeutics and Lifecore Biomedical 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.