Correlation Between Bio Path and Lipocine
Can any of the company-specific risk be diversified away by investing in both Bio Path 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 Bio Path and Lipocine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bio Path Holdings and Lipocine, you can compare the effects of market volatilities on Bio Path 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 Bio Path with a short position of Lipocine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bio Path and Lipocine.
Diversification Opportunities for Bio Path and Lipocine
Significant diversification
The 3 months correlation between Bio and Lipocine is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Bio Path Holdings and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and Bio Path 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 Bio Path Holdings 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 Bio Path i.e., Bio Path and Lipocine go up and down completely randomly.
Pair Corralation between Bio Path and Lipocine
Given the investment horizon of 90 days Bio Path Holdings is expected to under-perform the Lipocine. But the stock apears to be less risky and, when comparing its historical volatility, Bio Path Holdings is 1.25 times less risky than Lipocine. The stock trades about -0.25 of its potential returns per unit of risk. The Lipocine is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 555.00 in Lipocine on August 29, 2024 and sell it today you would lose (113.00) from holding Lipocine or give up 20.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bio Path Holdings vs. Lipocine
Performance |
| Timeline |
| Bio Path Holdings |
| Lipocine |
Bio Path and Lipocine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bio Path and Lipocine
The main advantage of trading using opposite Bio Path and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bio Path 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.| Bio Path vs. Capricor Therapeutics | Bio Path vs. NextCure | Bio Path vs. Pulmatrix | Bio Path vs. Crinetics Pharmaceuticals |
| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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