Correlation Between Albertsons Companies and Lipocine
Can any of the company-specific risk be diversified away by investing in both Albertsons Companies and Lipocine 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 Albertsons Companies and Lipocine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Albertsons Companies and Lipocine, you can compare the effects of market volatilities on Albertsons Companies and Lipocine 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 Albertsons Companies with a short position of Lipocine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albertsons Companies and Lipocine.
Diversification Opportunities for Albertsons Companies and Lipocine
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Albertsons and Lipocine is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Albertsons Companies and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and Albertsons Companies 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 Albertsons Companies are associated (or correlated) with Lipocine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lipocine has no effect on the direction of Albertsons Companies i.e., Albertsons Companies and Lipocine go up and down completely randomly.
Pair Corralation between Albertsons Companies and Lipocine
Considering the 90-day investment horizon Albertsons Companies is expected to generate 0.21 times more return on investment than Lipocine. However, Albertsons Companies is 4.68 times less risky than Lipocine. It trades about 0.22 of its potential returns per unit of risk. Lipocine is currently generating about -0.13 per unit of risk. If you would invest 1,834 in Albertsons Companies on August 28, 2024 and sell it today you would earn a total of 120.00 from holding Albertsons Companies or generate 6.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Albertsons Companies vs. Lipocine
Performance |
| Timeline |
| Albertsons Companies |
| Lipocine |
Albertsons Companies and Lipocine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Albertsons Companies and Lipocine
The main advantage of trading using opposite Albertsons Companies and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albertsons Companies position performs unexpectedly, Lipocine 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 Lipocine will offset losses from the drop in Lipocine's long position.| Albertsons Companies vs. Innovative Food Hldg | Albertsons Companies vs. Calavo Growers | Albertsons Companies vs. The Chefs Warehouse | Albertsons Companies vs. AMCON Distributing |
| Lipocine vs. Reviva Pharmaceuticals Holdings | Lipocine vs. ZyVersa Therapeutics | Lipocine vs. Unicycive Therapeutics | Lipocine vs. Checkpoint Therapeutics |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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