Correlation Between Loncar Cancer and First Trust

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

By analyzing existing cross correlation between Loncar Cancer Immunotherapy and First Trust China, you can compare the effects of market volatilities on Loncar Cancer and First Trust 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 Loncar Cancer with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loncar Cancer and First Trust.

Diversification Opportunities for Loncar Cancer and First Trust

0.31

Correlation Coefficient

Loncar Cancer  First Trust

Weak diversification

The 3 months correlation between Loncar and First is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Loncar Cancer Immunotherapy and First Trust China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust China and Loncar Cancer 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 Loncar Cancer Immunotherapy are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust China has no effect on the direction of Loncar Cancer i.e., Loncar Cancer and First Trust go up and down completely randomly.

Pair Corralation between Loncar Cancer and First Trust

Given the investment horizon of 90 days Loncar Cancer is expected to generate 3.66 times less return on investment than First Trust. But when comparing it to its historical volatility, Loncar Cancer Immunotherapy is 1.09 times less risky than First Trust. It trades about 0.0 of its potential returns per unit of risk. First Trust China is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2,052  in First Trust China on September 30, 2024 and sell it today you would lose (35.00) from holding First Trust China or give up 1.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.2%
Values	Daily Returns

Loncar Cancer Immunotherapy  vs.  First Trust China

Loncar Cancer Immuno

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Loncar Cancer Immunotherapy has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Etf's fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the ETF retail investors.

First Trust China

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First Trust China has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, First Trust is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Loncar Cancer and First Trust

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

The idea behind Loncar Cancer Immunotherapy and First Trust China 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.