Correlation Between Lantern Pharma and Aditxt

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

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

Diversification Opportunities for Lantern Pharma and Aditxt

0.62

Correlation Coefficient

Lantern Pharma  Aditxt

Poor diversification

The 3 months correlation between Lantern and Aditxt is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Lantern Pharma and Aditxt Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aditxt Inc and Lantern Pharma 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 Lantern Pharma are associated (or correlated) with Aditxt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aditxt Inc has no effect on the direction of Lantern Pharma i.e., Lantern Pharma and Aditxt go up and down completely randomly.

Pair Corralation between Lantern Pharma and Aditxt

Given the investment horizon of 90 days Lantern Pharma is expected to generate 0.38 times more return on investment than Aditxt. However, Lantern Pharma is 2.61 times less risky than Aditxt. It trades about -0.04 of its potential returns per unit of risk. Aditxt Inc is currently generating about -0.53 per unit of risk. If you would invest  366.00  in Lantern Pharma on September 3, 2024 and sell it today you would lose (50.00) from holding Lantern Pharma or give up 13.66% of portfolio value over 90 days.

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

Lantern Pharma  vs.  Aditxt Inc

Lantern Pharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lantern Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Aditxt Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aditxt Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating 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.

Pair Trading with Lantern Pharma and Aditxt

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

The idea behind Lantern Pharma and Aditxt Inc 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.

Check out your portfolio center.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.