Correlation Between LumiraDx and Psychemedics
Can any of the company-specific risk be diversified away by investing in both LumiraDx and Psychemedics 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 LumiraDx and Psychemedics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LumiraDx and Psychemedics, you can compare the effects of market volatilities on LumiraDx and Psychemedics 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 LumiraDx with a short position of Psychemedics. Check out your portfolio center. Please also check ongoing floating volatility patterns of LumiraDx and Psychemedics.
Diversification Opportunities for LumiraDx and Psychemedics
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LumiraDx and Psychemedics is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding LumiraDx and Psychemedics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Psychemedics and LumiraDx 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 LumiraDx are associated (or correlated) with Psychemedics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Psychemedics has no effect on the direction of LumiraDx i.e., LumiraDx and Psychemedics go up and down completely randomly.
Pair Corralation between LumiraDx and Psychemedics
If you would invest 0.00 in LumiraDx on February 13, 2024 and sell it today you would earn a total of 0.00 from holding LumiraDx or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 1.59% |
Values | Daily Returns |
LumiraDx vs. Psychemedics
Performance |
Timeline |
LumiraDx |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Psychemedics |
LumiraDx and Psychemedics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LumiraDx and Psychemedics
The main advantage of trading using opposite LumiraDx and Psychemedics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LumiraDx position performs unexpectedly, Psychemedics 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 Psychemedics will offset losses from the drop in Psychemedics' long position.LumiraDx vs. Fonar | LumiraDx vs. Burning Rock BiotechLtd | LumiraDx vs. Sera Prognostics | LumiraDx vs. Olink Holding AB |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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