Correlation Between Lees Pharmaceutical and One World

Can any of the company-specific risk be diversified away by investing in both Lees Pharmaceutical and One World 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 Lees Pharmaceutical and One World into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Lees Pharmaceutical and One World

-0.34

Correlation Coefficient

Lees Pharmaceutical  One World

Very good diversification

The 3 months correlation between Lees and One is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Lees Pharmaceutical Holdings and One World Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One World Pharma and Lees Pharmaceutical 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 Lees Pharmaceutical Holdings are associated (or correlated) with One World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One World Pharma has no effect on the direction of Lees Pharmaceutical i.e., Lees Pharmaceutical and One World go up and down completely randomly.

Pair Corralation between Lees Pharmaceutical and One World

If you would invest  2.60  in One World Pharma on September 3, 2024 and sell it today you would lose (0.30) from holding One World Pharma or give up 11.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Lees Pharmaceutical Holdings  vs.  One World Pharma

Lees Pharmaceutical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lees Pharmaceutical Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Lees Pharmaceutical is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

One World Pharma

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in One World Pharma are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, One World exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lees Pharmaceutical and One World

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

The idea behind Lees Pharmaceutical Holdings and One World 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.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.