Correlation Between INC Research and Lannett

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

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

Diversification Opportunities for INC Research and Lannett

0.0

Correlation Coefficient

INC Research  Lannett

Pay attention - limited upside

The 3 months correlation between INC and Lannett is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding INC Research Holdings and Lannett Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lannett Company and INC Research 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 INC Research Holdings are associated (or correlated) with Lannett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lannett Company has no effect on the direction of INC Research i.e., INC Research and Lannett go up and down completely randomly.

Pair Corralation between INC Research and Lannett

If you would invest  125.00  in INC Research Holdings on September 13, 2024 and sell it today you would earn a total of  11.00  from holding INC Research Holdings or generate 8.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

INC Research Holdings  vs.  Lannett Company

INC Research Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INC Research Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock'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 enterprise retail investors.

Lannett Company

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lannett Company has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Lannett is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with INC Research and Lannett

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

The idea behind INC Research Holdings and Lannett Company 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.