Correlation Between SIGA Technologies and Lantheus Holdings

Can any of the company-specific risk be diversified away by investing in both SIGA Technologies and Lantheus Holdings 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 SIGA Technologies and Lantheus Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for SIGA Technologies and Lantheus Holdings

-0.22

Correlation Coefficient

SIGA Technologies  Lantheus Holdings

Very good diversification

The 3 months correlation between SIGA and Lantheus is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding SIGA Technologies and Lantheus Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lantheus Holdings and SIGA Technologies 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 SIGA Technologies are associated (or correlated) with Lantheus Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lantheus Holdings has no effect on the direction of SIGA Technologies i.e., SIGA Technologies and Lantheus Holdings go up and down completely randomly.

Pair Corralation between SIGA Technologies and Lantheus Holdings

Given the investment horizon of 90 days SIGA Technologies is expected to under-perform the Lantheus Holdings. But the stock apears to be less risky and, when comparing its historical volatility, SIGA Technologies is 1.28 times less risky than Lantheus Holdings. The stock trades about -0.03 of its potential returns per unit of risk. The Lantheus Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  8,913  in Lantheus Holdings on December 28, 2024 and sell it today you would earn a total of  766.00  from holding Lantheus Holdings or generate 8.59% return on investment over 90 days.

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

SIGA Technologies  vs.  Lantheus Holdings

SIGA Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days SIGA Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, SIGA Technologies is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Lantheus Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lantheus Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Lantheus Holdings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with SIGA Technologies and Lantheus Holdings

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

The idea behind SIGA Technologies and Lantheus Holdings 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.