Correlation Between Lantern Pharma and Galera Therapeutics

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

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

Diversification Opportunities for Lantern Pharma and Galera Therapeutics

-0.13

Correlation Coefficient

Lantern Pharma  Galera Therapeutics

Good diversification

The 3 months correlation between Lantern and Galera is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Lantern Pharma and Galera Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galera Therapeutics 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 Galera Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galera Therapeutics has no effect on the direction of Lantern Pharma i.e., Lantern Pharma and Galera Therapeutics go up and down completely randomly.

Pair Corralation between Lantern Pharma and Galera Therapeutics

If you would invest  402.00  in Lantern Pharma on September 13, 2024 and sell it today you would lose (4.00) from holding Lantern Pharma or give up 1.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Lantern Pharma  vs.  Galera Therapeutics

Lantern Pharma

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lantern Pharma are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Lantern Pharma may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Galera Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Galera Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Galera Therapeutics is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lantern Pharma and Galera Therapeutics

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

The idea behind Lantern Pharma and Galera Therapeutics 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 CEOs Directory module to screen CEOs from public companies around the world.