Correlation Between Lifeline Biotechnologies and American Scientf

Can any of the company-specific risk be diversified away by investing in both Lifeline Biotechnologies and American Scientf 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 Lifeline Biotechnologies and American Scientf into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Lifeline Biotechnologies and American Scientf

0.0

Correlation Coefficient

Lifeline Biotechnologies  American Scientf

Pay attention - limited upside

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

Pair Corralation between Lifeline Biotechnologies and American Scientf

If you would invest  0.02  in Lifeline Biotechnologies on December 27, 2024 and sell it today you would lose (0.01) from holding Lifeline Biotechnologies or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Lifeline Biotechnologies  vs.  American Scientf

Lifeline Biotechnologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lifeline Biotechnologies are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting fundamental drivers, Lifeline Biotechnologies displayed solid returns over the last few months and may actually be approaching a breakup point.

American Scientf

Risk-Adjusted Performance

Very Weak

Over the last 90 days American Scientf has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, American Scientf is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lifeline Biotechnologies and American Scientf

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

The idea behind Lifeline Biotechnologies and American Scientf 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..