Correlation Between Longboard Pharmaceuticals and Theriva Biologics

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

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

Diversification Opportunities for Longboard Pharmaceuticals and Theriva Biologics

0.0

Correlation Coefficient

Longboard Pharmaceuticals  Theriva Biologics

Pay attention - limited upside

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

Pair Corralation between Longboard Pharmaceuticals and Theriva Biologics

If you would invest  130.00  in Theriva Biologics on December 21, 2024 and sell it today you would lose (10.00) from holding Theriva Biologics or give up 7.69% of portfolio value over 90 days.

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

Longboard Pharmaceuticals  vs.  Theriva Biologics

Longboard Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Longboard Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Longboard Pharmaceuticals is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Theriva Biologics

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Theriva Biologics are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Theriva Biologics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Longboard Pharmaceuticals and Theriva Biologics

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

The idea behind Longboard Pharmaceuticals and Theriva Biologics 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.