Correlation Between INmune Bio and Lantern Pharma

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

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

Diversification Opportunities for INmune Bio and Lantern Pharma

0.75

Correlation Coefficient

INmune Bio  Lantern Pharma

Poor diversification

The 3 months correlation between INmune and Lantern is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding INmune Bio and Lantern Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lantern Pharma and INmune Bio 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 INmune Bio are associated (or correlated) with Lantern Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lantern Pharma has no effect on the direction of INmune Bio i.e., INmune Bio and Lantern Pharma go up and down completely randomly.

Pair Corralation between INmune Bio and Lantern Pharma

Given the investment horizon of 90 days INmune Bio is expected to generate 1.03 times more return on investment than Lantern Pharma. However, INmune Bio is 1.03 times more volatile than Lantern Pharma. It trades about 0.15 of its potential returns per unit of risk. Lantern Pharma is currently generating about 0.06 per unit of risk. If you would invest  465.00  in INmune Bio on December 29, 2024 and sell it today you would earn a total of  287.00  from holding INmune Bio or generate 61.72% return on investment over 90 days.

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

INmune Bio  vs.  Lantern Pharma

INmune Bio

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in INmune Bio are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, INmune Bio sustained solid returns over the last few months and may actually be approaching a breakup point.

Lantern Pharma

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lantern Pharma are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Lantern Pharma displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with INmune Bio and Lantern Pharma

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

The idea behind INmune Bio and Lantern Pharma 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.