Correlation Between Enzo Biochem and LumiraDx

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

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

Diversification Opportunities for Enzo Biochem and LumiraDx

0.2

Correlation Coefficient

Enzo Biochem  LumiraDx

Modest diversification

The 3 months correlation between Enzo and LumiraDx is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Enzo Biochem and LumiraDx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LumiraDx and Enzo Biochem 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 Enzo Biochem are associated (or correlated) with LumiraDx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LumiraDx has no effect on the direction of Enzo Biochem i.e., Enzo Biochem and LumiraDx go up and down completely randomly.

Pair Corralation between Enzo Biochem and LumiraDx

If you would invest  42.00  in LumiraDx on September 29, 2024 and sell it today you would earn a total of  0.00  from holding LumiraDx or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Enzo Biochem  vs.  LumiraDx

Enzo Biochem

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enzo Biochem has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

LumiraDx

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Enzo Biochem and LumiraDx

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

The idea behind Enzo Biochem and LumiraDx 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.