Correlation Between PureBase Corp and Lotus Bio

Can any of the company-specific risk be diversified away by investing in both PureBase Corp and Lotus Bio 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 PureBase Corp and Lotus Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PureBase Corp and Lotus Bio Technology Development, you can compare the effects of market volatilities on PureBase Corp and Lotus Bio 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 PureBase Corp with a short position of Lotus Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of PureBase Corp and Lotus Bio.

Diversification Opportunities for PureBase Corp and Lotus Bio

0.0

Correlation Coefficient

PureBase Corp  Lotus Bio

Pay attention - limited upside

The 3 months correlation between PureBase and Lotus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PureBase Corp and Lotus Bio Technology Developme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus Bio Technology and PureBase Corp 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 PureBase Corp are associated (or correlated) with Lotus Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus Bio Technology has no effect on the direction of PureBase Corp i.e., PureBase Corp and Lotus Bio go up and down completely randomly.

Pair Corralation between PureBase Corp and Lotus Bio

If you would invest  7.50  in PureBase Corp on May 5, 2025 and sell it today you would lose (0.50) from holding PureBase Corp or give up 6.67% of portfolio value over 90 days.

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

PureBase Corp  vs.  Lotus Bio Technology Developme

PureBase Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PureBase Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental drivers, PureBase Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Lotus Bio Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lotus Bio Technology Development has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Lotus Bio is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with PureBase Corp and Lotus Bio

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

The idea behind PureBase Corp and Lotus Bio Technology Development 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.