Correlation Between Zivo Bioscience and Lumos Pharma

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

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

Diversification Opportunities for Zivo Bioscience and Lumos Pharma

-0.75

Correlation Coefficient

Zivo Bioscience  Lumos Pharma

Pay attention - limited upside

The 3 months correlation between Zivo and Lumos is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Zivo Bioscience and Lumos Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumos Pharma and Zivo 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 Zivo Bioscience are associated (or correlated) with Lumos Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lumos Pharma has no effect on the direction of Zivo Bioscience i.e., Zivo Bioscience and Lumos Pharma go up and down completely randomly.

Pair Corralation between Zivo Bioscience and Lumos Pharma

If you would invest  393.00  in Lumos Pharma on August 31, 2024 and sell it today you would earn a total of  37.00  from holding Lumos Pharma or generate 9.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

Zivo Bioscience  vs.  Lumos Pharma

Zivo Bioscience

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zivo Bioscience has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Zivo Bioscience is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Lumos Pharma

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lumos Pharma are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, Lumos Pharma may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Zivo Bioscience and Lumos Pharma

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

The idea behind Zivo Bioscience and Lumos Pharma 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.