Correlation Between Lixte Biotechnology and Histogen

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

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

Diversification Opportunities for Lixte Biotechnology and Histogen

-0.22

Correlation Coefficient

Lixte Biotechnology  Histogen

Very good diversification

The 3 months correlation between Lixte and Histogen is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Lixte Biotechnology Holdings and Histogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Histogen and Lixte Biotechnology 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 Lixte Biotechnology Holdings are associated (or correlated) with Histogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Histogen has no effect on the direction of Lixte Biotechnology i.e., Lixte Biotechnology and Histogen go up and down completely randomly.

Pair Corralation between Lixte Biotechnology and Histogen

Given the investment horizon of 90 days Lixte Biotechnology Holdings is expected to generate 0.66 times more return on investment than Histogen. However, Lixte Biotechnology Holdings is 1.52 times less risky than Histogen. It trades about 0.04 of its potential returns per unit of risk. Histogen is currently generating about -0.06 per unit of risk. If you would invest  200.00  in Lixte Biotechnology Holdings on September 18, 2024 and sell it today you would lose (1.00) from holding Lixte Biotechnology Holdings or give up 0.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Lixte Biotechnology Holdings  vs.  Histogen

Lixte Biotechnology

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lixte Biotechnology Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Lixte Biotechnology unveiled solid returns over the last few months and may actually be approaching a breakup point.

Histogen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Histogen 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 very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Lixte Biotechnology and Histogen

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

The idea behind Lixte Biotechnology Holdings and Histogen 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.