Correlation Between Boston Properties and Lipocine
Can any of the company-specific risk be diversified away by investing in both Boston Properties 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 Boston Properties and Lipocine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Properties and Lipocine, you can compare the effects of market volatilities on Boston Properties 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 Boston Properties with a short position of Lipocine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Properties and Lipocine.
Diversification Opportunities for Boston Properties and Lipocine
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Boston and Lipocine is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Boston Properties and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and Boston Properties 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 Boston Properties 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 Boston Properties i.e., Boston Properties and Lipocine go up and down completely randomly.
Pair Corralation between Boston Properties and Lipocine
Considering the 90-day investment horizon Boston Properties is expected to generate 0.22 times more return on investment than Lipocine. However, Boston Properties is 4.53 times less risky than Lipocine. It trades about 0.13 of its potential returns per unit of risk. Lipocine is currently generating about -0.2 per unit of risk. If you would invest 7,916 in Boston Properties on September 2, 2024 and sell it today you would earn a total of 283.00 from holding Boston Properties or generate 3.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Properties vs. Lipocine
Performance |
| Timeline |
| Boston Properties |
| Lipocine |
Boston Properties and Lipocine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Properties and Lipocine
The main advantage of trading using opposite Boston Properties and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Properties 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.| Boston Properties vs. Douglas Emmett | Boston Properties vs. Vornado Realty Trust | Boston Properties vs. Highwoods Properties | Boston Properties vs. Piedmont Office Realty |
| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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