Correlation Between Lucy Scientific and Journey Medical

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

By analyzing existing cross correlation between Lucy Scientific Discovery and Journey Medical Corp, you can compare the effects of market volatilities on Lucy Scientific and Journey Medical 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 Lucy Scientific with a short position of Journey Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lucy Scientific and Journey Medical.

Diversification Opportunities for Lucy Scientific and Journey Medical

0.0

Correlation Coefficient

Lucy Scientific  Journey Medical

Pay attention - limited upside

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

Pair Corralation between Lucy Scientific and Journey Medical

If you would invest  584.00  in Journey Medical Corp on December 2, 2024 and sell it today you would lose (21.00) from holding Journey Medical Corp or give up 3.6% of portfolio value over 90 days.

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

Lucy Scientific Discovery  vs.  Journey Medical Corp

Lucy Scientific Discovery

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lucy Scientific Discovery has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Lucy Scientific is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Journey Medical Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Journey Medical Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Journey Medical is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Lucy Scientific and Journey Medical

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

The idea behind Lucy Scientific Discovery and Journey Medical Corp 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.