Correlation Between LIFE Old and Antibe Therapeutics

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

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

Diversification Opportunities for LIFE Old and Antibe Therapeutics

0.0

Correlation Coefficient

LIFE Old  Antibe Therapeutics

Pay attention - limited upside

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

Pair Corralation between LIFE Old and Antibe Therapeutics

Given the investment horizon of 90 days LIFE Old is expected to under-perform the Antibe Therapeutics. In addition to that, LIFE Old is 1.13 times more volatile than Antibe Therapeutics. It trades about -0.04 of its total potential returns per unit of risk. Antibe Therapeutics is currently generating about 0.01 per unit of volatility. If you would invest  46.00  in Antibe Therapeutics on October 11, 2024 and sell it today you would lose (24.00) from holding Antibe Therapeutics or give up 52.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	70.71%
Values	Daily Returns

LIFE Old  vs.  Antibe Therapeutics

LIFE Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LIFE Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, LIFE Old is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Antibe Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Antibe Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Antibe Therapeutics is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with LIFE Old and Antibe Therapeutics

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

The idea behind LIFE Old and Antibe 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.