Correlation Between Cingulate and Lixte Biotechnology

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

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

Diversification Opportunities for Cingulate and Lixte Biotechnology

0.73

Correlation Coefficient

Cingulate  Lixte Biotechnology

Poor diversification

The 3 months correlation between Cingulate and Lixte is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Cingulate and Lixte Biotechnology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lixte Biotechnology and Cingulate 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 Cingulate 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 Cingulate i.e., Cingulate and Lixte Biotechnology go up and down completely randomly.

Pair Corralation between Cingulate and Lixte Biotechnology

Given the investment horizon of 90 days Cingulate is expected to generate 0.56 times more return on investment than Lixte Biotechnology. However, Cingulate is 1.79 times less risky than Lixte Biotechnology. It trades about -0.04 of its potential returns per unit of risk. Lixte Biotechnology Holdings is currently generating about -0.08 per unit of risk. If you would invest  498.00  in Cingulate on December 29, 2024 and sell it today you would lose (63.00) from holding Cingulate or give up 12.65% of portfolio value over 90 days.

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

Cingulate  vs.  Lixte Biotechnology Holdings

Cingulate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cingulate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Lixte Biotechnology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lixte Biotechnology Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Cingulate and Lixte Biotechnology

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

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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.