Correlation Between Lumos Pharma and Dyadic International

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

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

Diversification Opportunities for Lumos Pharma and Dyadic International

0.0

Correlation Coefficient

Lumos Pharma  Dyadic International

Pay attention - limited upside

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

Pair Corralation between Lumos Pharma and Dyadic International

If you would invest (100.00) in Lumos Pharma on December 19, 2024 and sell it today you would earn a total of  100.00  from holding Lumos Pharma or generate -100.0% return on investment over 90 days.

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

Lumos Pharma  vs.  Dyadic International

Lumos Pharma

Risk-Adjusted Performance

Very Weak

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

Dyadic International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dyadic International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Lumos Pharma and Dyadic International

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

The idea behind Lumos Pharma and Dyadic International 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.