Correlation Between Lantheus Holdings and SIGA Technologies

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

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

Diversification Opportunities for Lantheus Holdings and SIGA Technologies

-0.22

Correlation Coefficient

Lantheus Holdings  SIGA Technologies

Very good diversification

The 3 months correlation between Lantheus and SIGA is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Lantheus Holdings and SIGA Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIGA Technologies and Lantheus Holdings 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 Lantheus Holdings are associated (or correlated) with SIGA Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIGA Technologies has no effect on the direction of Lantheus Holdings i.e., Lantheus Holdings and SIGA Technologies go up and down completely randomly.

Pair Corralation between Lantheus Holdings and SIGA Technologies

Given the investment horizon of 90 days Lantheus Holdings is expected to generate 1.28 times more return on investment than SIGA Technologies. However, Lantheus Holdings is 1.28 times more volatile than SIGA Technologies. It trades about 0.06 of its potential returns per unit of risk. SIGA Technologies is currently generating about -0.03 per unit of risk. If you would invest  8,913  in Lantheus Holdings on December 28, 2024 and sell it today you would earn a total of  766.00  from holding Lantheus Holdings or generate 8.59% return on investment over 90 days.

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

Lantheus Holdings  vs.  SIGA Technologies

Lantheus Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lantheus Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Lantheus Holdings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

SIGA Technologies

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Lantheus Holdings and SIGA Technologies

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

The idea behind Lantheus Holdings and SIGA 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.