Correlation Between LumiraDx and Intelligent Bio

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

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

Diversification Opportunities for LumiraDx and Intelligent Bio

0.0

Correlation Coefficient

LumiraDx  Intelligent Bio

Pay attention - limited upside

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

Pair Corralation between LumiraDx and Intelligent Bio

If you would invest  160.00  in Intelligent Bio Solutions on November 29, 2024 and sell it today you would earn a total of  43.00  from holding Intelligent Bio Solutions or generate 26.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

LumiraDx  vs.  Intelligent Bio Solutions

LumiraDx

Risk-Adjusted Performance

Very Weak

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

Intelligent Bio Solutions

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intelligent Bio Solutions are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental drivers, Intelligent Bio unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LumiraDx and Intelligent Bio

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

The idea behind LumiraDx and Intelligent Bio Solutions 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.

Check out your portfolio center.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.