Correlation Between Can Fite and Lineage Cell
Can any of the company-specific risk be diversified away by investing in both Can Fite and Lineage Cell 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 Can Fite and Lineage Cell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Can Fite Biopharma and Lineage Cell Therapeutics, you can compare the effects of market volatilities on Can Fite and Lineage Cell 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 Can Fite with a short position of Lineage Cell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Can Fite and Lineage Cell.
Diversification Opportunities for Can Fite and Lineage Cell
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Can and Lineage is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Can Fite Biopharma and Lineage Cell Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lineage Cell Therapeutics and Can Fite 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 Can Fite Biopharma are associated (or correlated) with Lineage Cell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lineage Cell Therapeutics has no effect on the direction of Can Fite i.e., Can Fite and Lineage Cell go up and down completely randomly.
Pair Corralation between Can Fite and Lineage Cell
Assuming the 90 days trading horizon Can Fite Biopharma is expected to under-perform the Lineage Cell. But the stock apears to be less risky and, when comparing its historical volatility, Can Fite Biopharma is 2.01 times less risky than Lineage Cell. The stock trades about -0.13 of its potential returns per unit of risk. The Lineage Cell Therapeutics is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 45,670 in Lineage Cell Therapeutics on January 24, 2024 and sell it today you would lose (1,820) from holding Lineage Cell Therapeutics or give up 3.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Can Fite Biopharma vs. Lineage Cell Therapeutics
Performance |
| Timeline |
| Can Fite Biopharma |
| Lineage Cell Therapeutics |
Can Fite and Lineage Cell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Can Fite and Lineage Cell
The main advantage of trading using opposite Can Fite and Lineage Cell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Can Fite position performs unexpectedly, Lineage Cell 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 Lineage Cell will offset losses from the drop in Lineage Cell's long position.The idea behind Can Fite Biopharma and Lineage Cell Therapeutics 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.| Lineage Cell vs. Purple Biotech | Lineage Cell vs. BioLine RX | Lineage Cell vs. Clal Biotechnology Industries | Lineage Cell vs. Evogene |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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