Correlation Between Athenex and Lucy Scientific

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

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

Diversification Opportunities for Athenex and Lucy Scientific

0.94

Correlation Coefficient

Athenex  Lucy Scientific

Almost no diversification

The 3 months correlation between Athenex and Lucy is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Athenex 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 Athenex 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 Athenex 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 Athenex i.e., Athenex and Lucy Scientific go up and down completely randomly.

Pair Corralation between Athenex and Lucy Scientific

If you would invest  2.00  in Lucy Scientific Discovery on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Lucy Scientific Discovery or generate 0.0% return on investment over 90 days.

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

Athenex  vs.  Lucy Scientific Discovery

Athenex

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Athenex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Athenex is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Lucy Scientific Discovery

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lucy Scientific Discovery has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Lucy Scientific is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Athenex and Lucy Scientific

The main advantage of trading using opposite Athenex and Lucy Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Athenex 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.

The idea behind Athenex and Lucy Scientific Discovery 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.