Correlation Between Lexaria Bioscience and Immatics Biotechnologies

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

By analyzing existing cross correlation between Lexaria Bioscience Corp and immatics biotechnologies GmbH, you can compare the effects of market volatilities on Lexaria Bioscience and Immatics Biotechnologies 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 Lexaria Bioscience with a short position of Immatics Biotechnologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lexaria Bioscience and Immatics Biotechnologies.

Diversification Opportunities for Lexaria Bioscience and Immatics Biotechnologies

0.67

Correlation Coefficient

Lexaria Bioscience  Immatics Biotechnologies

Poor diversification

The 3 months correlation between Lexaria and Immatics is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Lexaria Bioscience Corp and immatics biotechnologies GmbH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immatics Biotechnologies and Lexaria Bioscience 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 Lexaria Bioscience Corp are associated (or correlated) with Immatics Biotechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immatics Biotechnologies has no effect on the direction of Lexaria Bioscience i.e., Lexaria Bioscience and Immatics Biotechnologies go up and down completely randomly.

Pair Corralation between Lexaria Bioscience and Immatics Biotechnologies

Given the investment horizon of 90 days Lexaria Bioscience Corp is expected to generate 0.3 times more return on investment than Immatics Biotechnologies. However, Lexaria Bioscience Corp is 3.32 times less risky than Immatics Biotechnologies. It trades about -0.1 of its potential returns per unit of risk. immatics biotechnologies GmbH is currently generating about -0.24 per unit of risk. If you would invest  275.00  in Lexaria Bioscience Corp on October 20, 2024 and sell it today you would lose (85.00) from holding Lexaria Bioscience Corp or give up 30.91% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	88.71%
Values	Daily Returns

Lexaria Bioscience Corp  vs.  immatics biotechnologies GmbH

Lexaria Bioscience Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lexaria Bioscience Corp 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 fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Immatics Biotechnologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days immatics biotechnologies GmbH has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Lexaria Bioscience and Immatics Biotechnologies

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

The idea behind Lexaria Bioscience Corp and immatics biotechnologies GmbH 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.