Correlation Between Windtree Therapeutics and 180 Life

Can any of the company-specific risk be diversified away by investing in both Windtree Therapeutics and 180 Life 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 Windtree Therapeutics and 180 Life into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Windtree Therapeutics and 180 Life Sciences, you can compare the effects of market volatilities on Windtree Therapeutics and 180 Life 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 Windtree Therapeutics with a short position of 180 Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Windtree Therapeutics and 180 Life.

Diversification Opportunities for Windtree Therapeutics and 180 Life

0.94

Correlation Coefficient

Windtree Therapeutics  180 Life

Almost no diversification

The 3 months correlation between Windtree and 180 is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Windtree Therapeutics and 180 Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 180 Life Sciences and Windtree Therapeutics 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 Windtree Therapeutics are associated (or correlated) with 180 Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 180 Life Sciences has no effect on the direction of Windtree Therapeutics i.e., Windtree Therapeutics and 180 Life go up and down completely randomly.

Pair Corralation between Windtree Therapeutics and 180 Life

Given the investment horizon of 90 days Windtree Therapeutics is expected to under-perform the 180 Life. In addition to that, Windtree Therapeutics is 2.4 times more volatile than 180 Life Sciences. It trades about -0.33 of its total potential returns per unit of risk. 180 Life Sciences is currently generating about -0.24 per unit of volatility. If you would invest  194.00  in 180 Life Sciences on December 28, 2024 and sell it today you would lose (91.00) from holding 180 Life Sciences or give up 46.91% of portfolio value over 90 days.

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

Windtree Therapeutics  vs.  180 Life Sciences

Windtree Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Windtree Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating 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.

180 Life Sciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days 180 Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Windtree Therapeutics and 180 Life

The main advantage of trading using opposite Windtree Therapeutics and 180 Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Windtree Therapeutics position performs unexpectedly, 180 Life 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 180 Life will offset losses from the drop in 180 Life's long position.

The idea behind Windtree Therapeutics and 180 Life Sciences 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 Stocks Directory module to find actively traded stocks across global markets.