Correlation Between Lixte Biotechnology and WuXi Biologics
Can any of the company-specific risk be diversified away by investing in both Lixte Biotechnology and WuXi Biologics 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 Lixte Biotechnology and WuXi Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lixte Biotechnology Holdings and WuXi Biologics, you can compare the effects of market volatilities on Lixte Biotechnology and WuXi Biologics 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 Lixte Biotechnology with a short position of WuXi Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lixte Biotechnology and WuXi Biologics.
Diversification Opportunities for Lixte Biotechnology and WuXi Biologics
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lixte and WuXi is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Lixte Biotechnology Holdings and WuXi Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WuXi Biologics and Lixte Biotechnology 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 Lixte Biotechnology Holdings are associated (or correlated) with WuXi Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WuXi Biologics has no effect on the direction of Lixte Biotechnology i.e., Lixte Biotechnology and WuXi Biologics go up and down completely randomly.
Pair Corralation between Lixte Biotechnology and WuXi Biologics
Given the investment horizon of 90 days Lixte Biotechnology Holdings is expected to generate 1.72 times more return on investment than WuXi Biologics. However, Lixte Biotechnology is 1.72 times more volatile than WuXi Biologics. It trades about 0.0 of its potential returns per unit of risk. WuXi Biologics is currently generating about -0.09 per unit of risk. If you would invest 568.00 in Lixte Biotechnology Holdings on January 24, 2024 and sell it today you would lose (233.00) from holding Lixte Biotechnology Holdings or give up 41.02% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Lixte Biotechnology Holdings vs. WuXi Biologics
Performance |
Timeline |
Lixte Biotechnology |
WuXi Biologics |
Lixte Biotechnology and WuXi Biologics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lixte Biotechnology and WuXi Biologics
The main advantage of trading using opposite Lixte Biotechnology and WuXi Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lixte Biotechnology position performs unexpectedly, WuXi Biologics 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 WuXi Biologics will offset losses from the drop in WuXi Biologics' long position.Lixte Biotechnology vs. Allarity Therapeutics | Lixte Biotechnology vs. Neurobo Pharmaceuticals | Lixte Biotechnology vs. Virax Biolabs Group | Lixte Biotechnology vs. Quoin Pharmaceuticals Ltd |
WuXi Biologics vs. biOasis Technologies | WuXi Biologics vs. Covalon Technologies | WuXi Biologics vs. Ceapro Inc | WuXi Biologics vs. Resverlogix 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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