Correlation Between Lifecore Biomedical and Assertio Therapeutics

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

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

Diversification Opportunities for Lifecore Biomedical and Assertio Therapeutics

0.21

Correlation Coefficient

Lifecore Biomedical  Assertio Therapeutics

Modest diversification

The 3 months correlation between Lifecore and Assertio is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Lifecore Biomedical and Assertio Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assertio Therapeutics 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 Assertio Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assertio Therapeutics has no effect on the direction of Lifecore Biomedical i.e., Lifecore Biomedical and Assertio Therapeutics go up and down completely randomly.

Pair Corralation between Lifecore Biomedical and Assertio Therapeutics

Given the investment horizon of 90 days Lifecore Biomedical is expected to generate 1.47 times more return on investment than Assertio Therapeutics. However, Lifecore Biomedical is 1.47 times more volatile than Assertio Therapeutics. It trades about -0.01 of its potential returns per unit of risk. Assertio Therapeutics is currently generating about -0.13 per unit of risk. If you would invest  742.00  in Lifecore Biomedical on December 30, 2024 and sell it today you would lose (57.00) from holding Lifecore Biomedical or give up 7.68% of portfolio value over 90 days.

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

Lifecore Biomedical  vs.  Assertio Therapeutics

Lifecore Biomedical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lifecore Biomedical has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Lifecore Biomedical is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Assertio Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Assertio Therapeutics 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 Lifecore Biomedical and Assertio Therapeutics

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

The idea behind Lifecore Biomedical and Assertio Therapeutics 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.