Correlation Between Tff Pharmaceuticals and Lantern Pharma

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

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

Diversification Opportunities for Tff Pharmaceuticals and Lantern Pharma

0.56

Correlation Coefficient

Tff Pharmaceuticals  Lantern Pharma

Very weak diversification

The 3 months correlation between Tff and Lantern is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Tff Pharmaceuticals and Lantern Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lantern Pharma and Tff Pharmaceuticals 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 Tff Pharmaceuticals are associated (or correlated) with Lantern Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lantern Pharma has no effect on the direction of Tff Pharmaceuticals i.e., Tff Pharmaceuticals and Lantern Pharma go up and down completely randomly.

Pair Corralation between Tff Pharmaceuticals and Lantern Pharma

Given the investment horizon of 90 days Tff Pharmaceuticals is expected to under-perform the Lantern Pharma. In addition to that, Tff Pharmaceuticals is 3.62 times more volatile than Lantern Pharma. It trades about -0.36 of its total potential returns per unit of risk. Lantern Pharma is currently generating about -0.02 per unit of volatility. If you would invest  326.00  in Lantern Pharma on August 31, 2024 and sell it today you would lose (15.00) from holding Lantern Pharma or give up 4.6% of portfolio value over 90 days.

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

Tff Pharmaceuticals  vs.  Lantern Pharma

Tff Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tff Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

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 unsteady 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.

Pair Trading with Tff Pharmaceuticals and Lantern Pharma

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

The idea behind Tff Pharmaceuticals and Lantern Pharma 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.