Correlation Between Equinix and LakeShore Biopharma

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

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

Diversification Opportunities for Equinix and LakeShore Biopharma

-0.53

Correlation Coefficient

Equinix  LakeShore Biopharma

Excellent diversification

The 3 months correlation between Equinix and LakeShore is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Equinix and LakeShore Biopharma Co, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LakeShore Biopharma Co, and Equinix 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 Equinix are associated (or correlated) with LakeShore Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LakeShore Biopharma Co, has no effect on the direction of Equinix i.e., Equinix and LakeShore Biopharma go up and down completely randomly.

Pair Corralation between Equinix and LakeShore Biopharma

Given the investment horizon of 90 days Equinix is expected to generate 0.1 times more return on investment than LakeShore Biopharma. However, Equinix is 9.68 times less risky than LakeShore Biopharma. It trades about 0.23 of its potential returns per unit of risk. LakeShore Biopharma Co, is currently generating about -0.05 per unit of risk. If you would invest  81,786  in Equinix on September 5, 2024 and sell it today you would earn a total of  14,579  from holding Equinix or generate 17.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	64.06%
Values	Daily Returns

Equinix  vs.  LakeShore Biopharma Co,

Equinix

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Equinix are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent forward indicators, Equinix showed solid returns over the last few months and may actually be approaching a breakup point.

LakeShore Biopharma Co,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LakeShore Biopharma Co, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Equinix and LakeShore Biopharma

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

The idea behind Equinix and LakeShore Biopharma Co, 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 CEOs Directory module to screen CEOs from public companies around the world.