Correlation Between LIFE Old and Awakn Life

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

By analyzing existing cross correlation between LIFE Old and Awakn Life Sciences, you can compare the effects of market volatilities on LIFE Old and Awakn Life 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 Awakn Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFE Old and Awakn Life.

Diversification Opportunities for LIFE Old and Awakn Life

0.2

Correlation Coefficient

LIFE Old  Awakn Life

Modest diversification

The 3 months correlation between LIFE and Awakn is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding LIFE Old and Awakn Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Awakn Life Sciences 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 Awakn Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Awakn Life Sciences has no effect on the direction of LIFE Old i.e., LIFE Old and Awakn Life go up and down completely randomly.

Pair Corralation between LIFE Old and Awakn Life

If you would invest  6.50  in Awakn Life Sciences on October 26, 2024 and sell it today you would earn a total of  0.00  from holding Awakn Life Sciences or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	0.0%
Values	Daily Returns

LIFE Old  vs.  Awakn Life Sciences

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.

Awakn Life Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Awakn Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with LIFE Old and Awakn Life

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

The idea behind LIFE Old and Awakn Life Sciences 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..