Correlation Between Lixte Biotechnology and HighPeak Energy

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

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

Diversification Opportunities for Lixte Biotechnology and HighPeak Energy

-0.48

Correlation Coefficient

Lixte Biotechnology  HighPeak Energy

Very good diversification

The 3 months correlation between Lixte and HighPeak is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Lixte Biotechnology Holdings and HighPeak Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HighPeak Energy and Lixte Biotechnology 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 Lixte Biotechnology Holdings are associated (or correlated) with HighPeak Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HighPeak Energy has no effect on the direction of Lixte Biotechnology i.e., Lixte Biotechnology and HighPeak Energy go up and down completely randomly.

Pair Corralation between Lixte Biotechnology and HighPeak Energy

Assuming the 90 days horizon Lixte Biotechnology Holdings is expected to generate 1.6 times more return on investment than HighPeak Energy. However, Lixte Biotechnology is 1.6 times more volatile than HighPeak Energy. It trades about 0.1 of its potential returns per unit of risk. HighPeak Energy is currently generating about -0.07 per unit of risk. If you would invest  2.90  in Lixte Biotechnology Holdings on December 30, 2024 and sell it today you would earn a total of  0.50  from holding Lixte Biotechnology Holdings or generate 17.24% return on investment over 90 days.

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

Lixte Biotechnology Holdings  vs.  HighPeak Energy

Lixte Biotechnology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lixte Biotechnology Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Lixte Biotechnology showed solid returns over the last few months and may actually be approaching a breakup point.

HighPeak Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days HighPeak Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's technical and fundamental indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Lixte Biotechnology and HighPeak Energy

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

The idea behind Lixte Biotechnology Holdings and HighPeak Energy 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.