Correlation Between Lifeline Biotechnologies and Ingen Technologies

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

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

Diversification Opportunities for Lifeline Biotechnologies and Ingen Technologies

0.0

Correlation Coefficient

Lifeline Biotechnologies  Ingen Technologies

Pay attention - limited upside

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

Pair Corralation between Lifeline Biotechnologies and Ingen Technologies

Given the investment horizon of 90 days Lifeline Biotechnologies is expected to generate 1.11 times more return on investment than Ingen Technologies. However, Lifeline Biotechnologies is 1.11 times more volatile than Ingen Technologies. It trades about 0.13 of its potential returns per unit of risk. Ingen Technologies is currently generating about 0.08 per unit of risk. If you would invest  0.03  in Lifeline Biotechnologies on September 23, 2024 and sell it today you would lose (0.02) from holding Lifeline Biotechnologies or give up 66.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	76.61%
Values	Daily Returns

Lifeline Biotechnologies  vs.  Ingen Technologies

Lifeline Biotechnologies

Risk-Adjusted Performance

12 of 100

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 unfluctuating fundamental drivers, Lifeline Biotechnologies displayed solid returns over the last few months and may actually be approaching a breakup point.

Ingen Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ingen Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Ingen Technologies is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Lifeline Biotechnologies and Ingen Technologies

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

The idea behind Lifeline Biotechnologies and Ingen Technologies 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.