Correlation Between Evotec SE and Lucy Scientific
Can any of the company-specific risk be diversified away by investing in both Evotec SE and Lucy Scientific 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 Evotec SE and Lucy Scientific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evotec SE ADR and Lucy Scientific Discovery, you can compare the effects of market volatilities on Evotec SE and Lucy Scientific 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 Evotec SE with a short position of Lucy Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evotec SE and Lucy Scientific.
Diversification Opportunities for Evotec SE and Lucy Scientific
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Evotec and Lucy is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Evotec SE ADR and Lucy Scientific Discovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucy Scientific Discovery and Evotec SE 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 Evotec SE ADR are associated (or correlated) with Lucy Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lucy Scientific Discovery has no effect on the direction of Evotec SE i.e., Evotec SE and Lucy Scientific go up and down completely randomly.
Pair Corralation between Evotec SE and Lucy Scientific
Considering the 90-day investment horizon Evotec SE ADR is expected to under-perform the Lucy Scientific. But the stock apears to be less risky and, when comparing its historical volatility, Evotec SE ADR is 5.82 times less risky than Lucy Scientific. The stock trades about -0.1 of its potential returns per unit of risk. The Lucy Scientific Discovery is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 179.00 in Lucy Scientific Discovery on March 5, 2024 and sell it today you would lose (96.00) from holding Lucy Scientific Discovery or give up 53.63% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Evotec SE ADR vs. Lucy Scientific Discovery
Performance |
Timeline |
Evotec SE ADR |
Lucy Scientific Discovery |
Evotec SE and Lucy Scientific Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Evotec SE and Lucy Scientific
The main advantage of trading using opposite Evotec SE and Lucy Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evotec SE position performs unexpectedly, Lucy Scientific 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 Lucy Scientific will offset losses from the drop in Lucy Scientific's long position.Evotec SE vs. Prestige Brand Holdings | Evotec SE vs. Supernus Pharmaceuticals | Evotec SE vs. Collegium Pharmaceutical | Evotec SE vs. Deciphera Pharmaceuticals LLC |
Lucy Scientific vs. Shuttle Pharmaceuticals | Lucy Scientific vs. Lifecore Biomedical | Lucy Scientific vs. Journey Medical Corp | Lucy Scientific vs. Akanda Corp |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Transaction History View history of all your transactions and understand their impact on performance | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |