Correlation Between Lannett and Medicure

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

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

Diversification Opportunities for Lannett and Medicure

0.0

Correlation Coefficient

Lannett  Medicure

Pay attention - limited upside

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

Pair Corralation between Lannett and Medicure

If you would invest (100.00) in Lannett Company on September 14, 2024 and sell it today you would earn a total of  100.00  from holding Lannett Company or generate -100.0% return on investment over 90 days.

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

Lannett Company  vs.  Medicure

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.

Medicure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Medicure has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward-looking indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Lannett and Medicure

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

The idea behind Lannett Company and Medicure 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..