Correlation Between Viatris and Lantheus Holdings

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

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

Diversification Opportunities for Viatris and Lantheus Holdings

0.17

Correlation Coefficient

Viatris  Lantheus Holdings

Average diversification

The 3 months correlation between Viatris and Lantheus is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Viatris and Lantheus Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lantheus Holdings and Viatris 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 Viatris 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 Viatris i.e., Viatris and Lantheus Holdings go up and down completely randomly.

Pair Corralation between Viatris and Lantheus Holdings

Given the investment horizon of 90 days Viatris is expected to under-perform the Lantheus Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Viatris is 1.32 times less risky than Lantheus Holdings. The stock trades about -0.24 of its potential returns per unit of risk. The Lantheus Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  8,958  in Lantheus Holdings on December 1, 2024 and sell it today you would earn a total of  424.00  from holding Lantheus Holdings or generate 4.73% return on investment over 90 days.

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

Viatris  vs.  Lantheus Holdings

Viatris

Risk-Adjusted Performance

Very Weak

Over the last 90 days Viatris has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private 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 3 (%) 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 Viatris and Lantheus Holdings

The main advantage of trading using opposite Viatris and Lantheus Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viatris 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 Viatris 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.