Correlation Between Regencell Bioscience and Lifecore Biomedical

Can any of the company-specific risk be diversified away by investing in both Regencell Bioscience and Lifecore Biomedical 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 Regencell Bioscience and Lifecore Biomedical into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Regencell Bioscience and Lifecore Biomedical

0.05

Correlation Coefficient

Regencell Bioscience  Lifecore Biomedical

Significant diversification

The 3 months correlation between Regencell and Lifecore is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Regencell Bioscience Holdings and Lifecore Biomedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifecore Biomedical and Regencell Bioscience 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 Regencell Bioscience Holdings are associated (or correlated) with Lifecore Biomedical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifecore Biomedical has no effect on the direction of Regencell Bioscience i.e., Regencell Bioscience and Lifecore Biomedical go up and down completely randomly.

Pair Corralation between Regencell Bioscience and Lifecore Biomedical

Considering the 90-day investment horizon Regencell Bioscience Holdings is expected to under-perform the Lifecore Biomedical. In addition to that, Regencell Bioscience is 1.72 times more volatile than Lifecore Biomedical. It trades about -0.02 of its total potential returns per unit of risk. Lifecore Biomedical is currently generating about 0.25 per unit of volatility. If you would invest  593.00  in Lifecore Biomedical on August 31, 2024 and sell it today you would earn a total of  148.00  from holding Lifecore Biomedical or generate 24.96% return on investment over 90 days.

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

Regencell Bioscience Holdings  vs.  Lifecore Biomedical

Regencell Bioscience

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Regencell Bioscience Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Regencell Bioscience exhibited solid returns over the last few months and may actually be approaching a breakup point.

Lifecore Biomedical

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lifecore Biomedical are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating fundamental indicators, Lifecore Biomedical reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Regencell Bioscience and Lifecore Biomedical

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

The idea behind Regencell Bioscience Holdings and Lifecore Biomedical 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.