Correlation Between OncoCyte Corp and LMF Acquisition

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

By analyzing existing cross correlation between OncoCyte Corp and LMF Acquisition Opportunities, you can compare the effects of market volatilities on OncoCyte Corp and LMF Acquisition 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 OncoCyte Corp with a short position of LMF Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of OncoCyte Corp and LMF Acquisition.

Diversification Opportunities for OncoCyte Corp and LMF Acquisition

0.86

Correlation Coefficient

OncoCyte Corp  LMF Acquisition

Very poor diversification

The 3 months correlation between OncoCyte and LMF is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding OncoCyte Corp and LMF Acquisition Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LMF Acquisition Oppo and OncoCyte Corp 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 OncoCyte Corp are associated (or correlated) with LMF Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LMF Acquisition Oppo has no effect on the direction of OncoCyte Corp i.e., OncoCyte Corp and LMF Acquisition go up and down completely randomly.

Pair Corralation between OncoCyte Corp and LMF Acquisition

Considering the 90-day investment horizon OncoCyte Corp is expected to generate 0.64 times more return on investment than LMF Acquisition. However, OncoCyte Corp is 1.57 times less risky than LMF Acquisition. It trades about -0.18 of its potential returns per unit of risk. LMF Acquisition Opportunities is currently generating about -0.21 per unit of risk. If you would invest  315.00  in OncoCyte Corp on October 23, 2024 and sell it today you would lose (107.00) from holding OncoCyte Corp or give up 33.97% of portfolio value over 90 days.

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

OncoCyte Corp  vs.  LMF Acquisition Opportunities

OncoCyte Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OncoCyte Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

LMF Acquisition Oppo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LMF Acquisition Opportunities has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with OncoCyte Corp and LMF Acquisition

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

The idea behind OncoCyte Corp and LMF Acquisition Opportunities 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.