Correlation Between Arrow Electronics and Lipocine
Can any of the company-specific risk be diversified away by investing in both Arrow Electronics 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 Arrow Electronics and Lipocine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Electronics and Lipocine, you can compare the effects of market volatilities on Arrow Electronics 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 Arrow Electronics with a short position of Lipocine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Electronics and Lipocine.
Diversification Opportunities for Arrow Electronics and Lipocine
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Arrow and Lipocine is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Electronics and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and Arrow Electronics 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 Arrow Electronics 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 Arrow Electronics i.e., Arrow Electronics and Lipocine go up and down completely randomly.
Pair Corralation between Arrow Electronics and Lipocine
Considering the 90-day investment horizon Arrow Electronics is expected to generate 0.5 times more return on investment than Lipocine. However, Arrow Electronics is 1.99 times less risky than Lipocine. It trades about -0.13 of its potential returns per unit of risk. Lipocine is currently generating about -0.13 per unit of risk. If you would invest 13,382 in Arrow Electronics on August 29, 2024 and sell it today you would lose (1,295) from holding Arrow Electronics or give up 9.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Electronics vs. Lipocine
Performance |
| Timeline |
| Arrow Electronics |
| Lipocine |
Arrow Electronics and Lipocine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Electronics and Lipocine
The main advantage of trading using opposite Arrow Electronics and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Electronics 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.| Arrow Electronics vs. Insight Enterprises | Arrow Electronics vs. Synnex | Arrow Electronics vs. Climb Global Solutions | Arrow Electronics vs. ScanSource |
| 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |