Correlation Between Lifecore Biomedical and Arvinas

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

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

Diversification Opportunities for Lifecore Biomedical and Arvinas

-0.41

Correlation Coefficient

Lifecore Biomedical  Arvinas

Very good diversification

The 3 months correlation between Lifecore and Arvinas is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Lifecore Biomedical and Arvinas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arvinas and Lifecore Biomedical 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 Lifecore Biomedical are associated (or correlated) with Arvinas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arvinas has no effect on the direction of Lifecore Biomedical i.e., Lifecore Biomedical and Arvinas go up and down completely randomly.

Pair Corralation between Lifecore Biomedical and Arvinas

Given the investment horizon of 90 days Lifecore Biomedical is expected to generate 1.12 times more return on investment than Arvinas. However, Lifecore Biomedical is 1.12 times more volatile than Arvinas. It trades about 0.1 of its potential returns per unit of risk. Arvinas is currently generating about -0.12 per unit of risk. If you would invest  531.00  in Lifecore Biomedical on October 23, 2024 and sell it today you would earn a total of  125.00  from holding Lifecore Biomedical or generate 23.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Lifecore Biomedical  vs.  Arvinas

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.

Arvinas

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arvinas has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Lifecore Biomedical and Arvinas

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

The idea behind Lifecore Biomedical and Arvinas 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.