Correlation Between Adaptimmune Therapeutics and Lipocine

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Can any of the company-specific risk be diversified away by investing in both Adaptimmune Therapeutics 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 Adaptimmune Therapeutics and Lipocine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adaptimmune Therapeutics Plc and Lipocine, you can compare the effects of market volatilities on Adaptimmune Therapeutics 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 Adaptimmune Therapeutics with a short position of Lipocine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adaptimmune Therapeutics and Lipocine.

Diversification Opportunities for Adaptimmune Therapeutics and Lipocine

AdaptimmuneLipocineDiversified AwayAdaptimmuneLipocineDiversified Away100%
0.36
  Correlation Coefficient

Weak diversification

The 3 months correlation between Adaptimmune and Lipocine is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Adaptimmune Therapeutics Plc and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and Adaptimmune Therapeutics 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 Adaptimmune Therapeutics Plc 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 Adaptimmune Therapeutics i.e., Adaptimmune Therapeutics and Lipocine go up and down completely randomly.

Pair Corralation between Adaptimmune Therapeutics and Lipocine

Given the investment horizon of 90 days Adaptimmune Therapeutics Plc is expected to generate 0.58 times more return on investment than Lipocine. However, Adaptimmune Therapeutics Plc is 1.72 times less risky than Lipocine. It trades about -0.03 of its potential returns per unit of risk. Lipocine is currently generating about -0.37 per unit of risk. If you would invest  58.00  in Adaptimmune Therapeutics Plc on November 27, 2024 and sell it today you would lose (1.31) from holding Adaptimmune Therapeutics Plc or give up 2.26% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Adaptimmune Therapeutics Plc  vs.  Lipocine

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -30-20-1001020
JavaScript chart by amCharts 3.21.15ADAP LPCN
       Timeline  
Adaptimmune Therapeutics 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Adaptimmune Therapeutics Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.550.60.650.7
Lipocine 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Lipocine 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 fundamental indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb33.544.555.5

Adaptimmune Therapeutics and Lipocine Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.97-4.47-2.97-1.47-0.0251.412.894.375.857.34 0.0200.0220.0240.0260.028
JavaScript chart by amCharts 3.21.15ADAP LPCN
       Returns  

Pair Trading with Adaptimmune Therapeutics and Lipocine

The main advantage of trading using opposite Adaptimmune Therapeutics and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adaptimmune Therapeutics 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.
The idea behind Adaptimmune Therapeutics Plc and Lipocine 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

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