Correlation Between AlzeCure Pharma and Lyko Group

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

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

Diversification Opportunities for AlzeCure Pharma and Lyko Group

-0.54

Correlation Coefficient

AlzeCure Pharma  Lyko Group

Excellent diversification

The 3 months correlation between AlzeCure and Lyko is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding AlzeCure Pharma and Lyko Group A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyko Group A and AlzeCure Pharma 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 AlzeCure Pharma are associated (or correlated) with Lyko Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyko Group A has no effect on the direction of AlzeCure Pharma i.e., AlzeCure Pharma and Lyko Group go up and down completely randomly.

Pair Corralation between AlzeCure Pharma and Lyko Group

Assuming the 90 days trading horizon AlzeCure Pharma is expected to generate 2.33 times more return on investment than Lyko Group. However, AlzeCure Pharma is 2.33 times more volatile than Lyko Group A. It trades about -0.08 of its potential returns per unit of risk. Lyko Group A is currently generating about -0.33 per unit of risk. If you would invest  209.00  in AlzeCure Pharma on February 6, 2024 and sell it today you would lose (31.00) from holding AlzeCure Pharma or give up 14.83% of portfolio value over 90 days.

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

AlzeCure Pharma  vs.  Lyko Group A

AlzeCure Pharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AlzeCure Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Lyko Group A

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lyko Group A are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Lyko Group sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AlzeCure Pharma and Lyko Group

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

The idea behind AlzeCure Pharma and Lyko Group A 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.