Correlation Between Athenex and Lifecore Biomedical

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

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

Diversification Opportunities for Athenex and Lifecore Biomedical

-0.83

Correlation Coefficient

Athenex  Lifecore Biomedical

Pay attention - limited upside

The 3 months correlation between Athenex and Lifecore is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Athenex and Lifecore Biomedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifecore Biomedical and Athenex 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 Athenex 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 Athenex i.e., Athenex and Lifecore Biomedical go up and down completely randomly.

Pair Corralation between Athenex and Lifecore Biomedical

If you would invest  0.22  in Athenex on October 22, 2024 and sell it today you would earn a total of  0.00  from holding Athenex or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	5.26%
Values	Daily Returns

Athenex  vs.  Lifecore Biomedical

Athenex

Risk-Adjusted Performance

0 of 100

Very Weak

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

Lifecore Biomedical

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lifecore Biomedical are ranked lower than 7 (%) 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 Athenex and Lifecore Biomedical

The main advantage of trading using opposite Athenex and Lifecore Biomedical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Athenex 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 Athenex 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.