Correlation Between Processa Pharmaceuticals and Lee Enterprises

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

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

Diversification Opportunities for Processa Pharmaceuticals and Lee Enterprises

0.13

Correlation Coefficient

Processa Pharmaceuticals  Lee Enterprises

Average diversification

The 3 months correlation between Processa and Lee is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Processa Pharmaceuticals and Lee Enterprises Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lee Enterprises and Processa 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 Processa Pharmaceuticals are associated (or correlated) with Lee Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lee Enterprises has no effect on the direction of Processa Pharmaceuticals i.e., Processa Pharmaceuticals and Lee Enterprises go up and down completely randomly.

Pair Corralation between Processa Pharmaceuticals and Lee Enterprises

Given the investment horizon of 90 days Processa Pharmaceuticals is expected to generate 2.13 times more return on investment than Lee Enterprises. However, Processa Pharmaceuticals is 2.13 times more volatile than Lee Enterprises Incorporated. It trades about 0.04 of its potential returns per unit of risk. Lee Enterprises Incorporated is currently generating about -0.18 per unit of risk. If you would invest  24.00  in Processa Pharmaceuticals on May 11, 2025 and sell it today you would lose (1.00) from holding Processa Pharmaceuticals or give up 4.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Processa Pharmaceuticals  vs.  Lee Enterprises Incorporated

Processa Pharmaceuticals

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Processa Pharmaceuticals are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, Processa Pharmaceuticals sustained solid returns over the last few months and may actually be approaching a breakup point.

Lee Enterprises

Risk-Adjusted Performance

Weakest

Over the last 90 days Lee Enterprises Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Processa Pharmaceuticals and Lee Enterprises

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

The idea behind Processa Pharmaceuticals and Lee Enterprises Incorporated 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.