Correlation Between Lem Holding and Relief Therapeutics

Can any of the company-specific risk be diversified away by investing in both Lem Holding and Relief Therapeutics 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 Lem Holding and Relief Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lem Holding SA and Relief Therapeutics Holding, you can compare the effects of market volatilities on Lem Holding and Relief Therapeutics 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 Lem Holding with a short position of Relief Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lem Holding and Relief Therapeutics.

Diversification Opportunities for Lem Holding and Relief Therapeutics

-0.4

Correlation Coefficient

Lem Holding  Relief Therapeutics

Very good diversification

The 3 months correlation between Lem and Relief is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Lem Holding SA and Relief Therapeutics Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Relief Therapeutics and Lem Holding 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 Lem Holding SA are associated (or correlated) with Relief Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Relief Therapeutics has no effect on the direction of Lem Holding i.e., Lem Holding and Relief Therapeutics go up and down completely randomly.

Pair Corralation between Lem Holding and Relief Therapeutics

Assuming the 90 days trading horizon Lem Holding SA is expected to generate 0.28 times more return on investment than Relief Therapeutics. However, Lem Holding SA is 3.63 times less risky than Relief Therapeutics. It trades about 0.26 of its potential returns per unit of risk. Relief Therapeutics Holding is currently generating about 0.01 per unit of risk. If you would invest  64,400  in Lem Holding SA on April 22, 2025 and sell it today you would earn a total of  24,200  from holding Lem Holding SA or generate 37.58% return on investment over 90 days.

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

Lem Holding SA  vs.  Relief Therapeutics Holding

Lem Holding SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lem Holding SA are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Lem Holding showed solid returns over the last few months and may actually be approaching a breakup point.

Relief Therapeutics

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Relief Therapeutics Holding are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical and fundamental indicators, Relief Therapeutics may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Lem Holding and Relief Therapeutics

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

The idea behind Lem Holding SA and Relief Therapeutics Holding 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.