Correlation Between Lifecore Biomedical and Immunocore Holdings

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

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

Diversification Opportunities for Lifecore Biomedical and Immunocore Holdings

-0.25

Correlation Coefficient

Lifecore Biomedical  Immunocore Holdings

Very good diversification

The 3 months correlation between Lifecore and Immunocore is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Lifecore Biomedical and Immunocore Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immunocore Holdings 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 Immunocore Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immunocore Holdings has no effect on the direction of Lifecore Biomedical i.e., Lifecore Biomedical and Immunocore Holdings go up and down completely randomly.

Pair Corralation between Lifecore Biomedical and Immunocore Holdings

Given the investment horizon of 90 days Lifecore Biomedical is expected to under-perform the Immunocore Holdings. In addition to that, Lifecore Biomedical is 1.5 times more volatile than Immunocore Holdings. It trades about -0.01 of its total potential returns per unit of risk. Immunocore Holdings is currently generating about 0.05 per unit of volatility. If you would invest  2,814  in Immunocore Holdings on December 22, 2024 and sell it today you would earn a total of  167.00  from holding Immunocore Holdings or generate 5.93% return on investment over 90 days.

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

Lifecore Biomedical  vs.  Immunocore Holdings

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.

Immunocore Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Immunocore Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental indicators, Immunocore Holdings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Lifecore Biomedical and Immunocore Holdings

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

The idea behind Lifecore Biomedical and Immunocore Holdings 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.