Correlation Between Lineage Cell and Qsam Biosciences

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

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

Diversification Opportunities for Lineage Cell and Qsam Biosciences

0.55

Correlation Coefficient

Lineage Cell  Qsam Biosciences

Very weak diversification

The 3 months correlation between Lineage and Qsam is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Lineage Cell Therapeutics and Qsam Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qsam Biosciences and Lineage Cell 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 Lineage Cell Therapeutics are associated (or correlated) with Qsam Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qsam Biosciences has no effect on the direction of Lineage Cell i.e., Lineage Cell and Qsam Biosciences go up and down completely randomly.

Pair Corralation between Lineage Cell and Qsam Biosciences

If you would invest  449.00  in Qsam Biosciences on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Qsam Biosciences or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	0.3%
Values	Daily Returns

Lineage Cell Therapeutics  vs.  Qsam Biosciences

Lineage Cell Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lineage Cell Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak 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.

Qsam Biosciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qsam Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Qsam Biosciences is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Lineage Cell and Qsam Biosciences

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

The idea behind Lineage Cell Therapeutics and Qsam Biosciences 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.