Correlation Between Shuttle Pharmaceuticals and Lucy Scientific

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

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

Diversification Opportunities for Shuttle Pharmaceuticals and Lucy Scientific

-0.46

Correlation Coefficient

Shuttle Pharmaceuticals  Lucy Scientific

Very good diversification

The 3 months correlation between Shuttle and Lucy is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Shuttle Pharmaceuticals and Lucy Scientific Discovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucy Scientific Discovery and Shuttle 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 Shuttle Pharmaceuticals are associated (or correlated) with Lucy Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lucy Scientific Discovery has no effect on the direction of Shuttle Pharmaceuticals i.e., Shuttle Pharmaceuticals and Lucy Scientific go up and down completely randomly.

Pair Corralation between Shuttle Pharmaceuticals and Lucy Scientific

Given the investment horizon of 90 days Shuttle Pharmaceuticals is expected to generate 9.91 times less return on investment than Lucy Scientific. But when comparing it to its historical volatility, Shuttle Pharmaceuticals is 8.48 times less risky than Lucy Scientific. It trades about 0.04 of its potential returns per unit of risk. Lucy Scientific Discovery is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  206.00  in Lucy Scientific Discovery on February 19, 2024 and sell it today you would lose (60.00) from holding Lucy Scientific Discovery or give up 29.13% of portfolio value over 90 days.

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

Shuttle Pharmaceuticals  vs.  Lucy Scientific Discovery

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 fragile basic indicators, Shuttle Pharmaceuticals may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Lucy Scientific Discovery

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lucy Scientific Discovery are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile fundamental indicators, Lucy Scientific demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Shuttle Pharmaceuticals and Lucy Scientific

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

The idea behind Shuttle Pharmaceuticals and Lucy Scientific Discovery 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.