Correlation Between Larimar Therapeutics and AGE Old

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

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

Diversification Opportunities for Larimar Therapeutics and AGE Old

0.0

Correlation Coefficient

Larimar Therapeutics  AGE Old

Pay attention - limited upside

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

Pair Corralation between Larimar Therapeutics and AGE Old

Given the investment horizon of 90 days Larimar Therapeutics is expected to generate 2.53 times less return on investment than AGE Old. But when comparing it to its historical volatility, Larimar Therapeutics is 1.08 times less risky than AGE Old. It trades about 0.01 of its potential returns per unit of risk. AGE Old is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  75.00  in AGE Old on October 27, 2024 and sell it today you would lose (1.00) from holding AGE Old or give up 1.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	23.68%
Values	Daily Returns

Larimar Therapeutics  vs.  AGE Old

Larimar Therapeutics

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Larimar Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's primary indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

AGE Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AGE Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, AGE Old is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Larimar Therapeutics and AGE Old

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

The idea behind Larimar Therapeutics and AGE Old 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.