Correlation Between Lifecore Biomedical and Shuttle Pharmaceuticals

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

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

Diversification Opportunities for Lifecore Biomedical and Shuttle Pharmaceuticals

-0.43

Correlation Coefficient

Lifecore Biomedical  Shuttle Pharmaceuticals

Very good diversification

The 3 months correlation between Lifecore and Shuttle is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Lifecore Biomedical and Shuttle Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shuttle Pharmaceuticals and Lifecore Biomedical 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 Lifecore Biomedical are associated (or correlated) with Shuttle Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shuttle Pharmaceuticals has no effect on the direction of Lifecore Biomedical i.e., Lifecore Biomedical and Shuttle Pharmaceuticals go up and down completely randomly.

Pair Corralation between Lifecore Biomedical and Shuttle Pharmaceuticals

Given the investment horizon of 90 days Lifecore Biomedical is expected to under-perform the Shuttle Pharmaceuticals. In addition to that, Lifecore Biomedical is 1.59 times more volatile than Shuttle Pharmaceuticals. It trades about -0.09 of its total potential returns per unit of risk. Shuttle Pharmaceuticals is currently generating about 0.04 per unit of volatility. If you would invest  39.00  in Shuttle Pharmaceuticals on February 27, 2024 and sell it today you would earn a total of  2.00  from holding Shuttle Pharmaceuticals or generate 5.13% return on investment over 90 days.

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

Lifecore Biomedical  vs.  Shuttle Pharmaceuticals

Lifecore Biomedical

Risk-Adjusted Performance

0 of 100

Very Weak

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

Shuttle Pharmaceuticals

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Shuttle Pharmaceuticals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Shuttle Pharmaceuticals may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Lifecore Biomedical and Shuttle Pharmaceuticals

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

The idea behind Lifecore Biomedical and Shuttle Pharmaceuticals 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.