Correlation Between Day One and Lipocine
Can any of the company-specific risk be diversified away by investing in both Day One 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 Day One and Lipocine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Day One Biopharmaceuticals and Lipocine, you can compare the effects of market volatilities on Day One 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 Day One with a short position of Lipocine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Day One and Lipocine.
Diversification Opportunities for Day One and Lipocine
Very weak diversification
The 3 months correlation between Day and Lipocine is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Day One Biopharmaceuticals and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and Day One 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 Day One Biopharmaceuticals 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 Day One i.e., Day One and Lipocine go up and down completely randomly.
Pair Corralation between Day One and Lipocine
Given the investment horizon of 90 days Day One Biopharmaceuticals is expected to generate 0.67 times more return on investment than Lipocine. However, Day One Biopharmaceuticals is 1.49 times less risky than Lipocine. It trades about -0.04 of its potential returns per unit of risk. Lipocine is currently generating about -0.14 per unit of risk. If you would invest 1,267 in Day One Biopharmaceuticals on October 25, 2024 and sell it today you would lose (29.00) from holding Day One Biopharmaceuticals or give up 2.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Day One Biopharmaceuticals vs. Lipocine
Performance |
| Timeline |
| Day One Biopharmaceu |
| Lipocine |
Day One and Lipocine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Day One and Lipocine
The main advantage of trading using opposite Day One and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Day One 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.| Day One vs. Terns Pharmaceuticals | Day One vs. X4 Pharmaceuticals | Day One vs. Hookipa Pharma | Day One vs. Amylyx Pharmaceuticals |
| Lipocine vs. Terns Pharmaceuticals | Lipocine vs. X4 Pharmaceuticals | Lipocine vs. Day One Biopharmaceuticals | Lipocine vs. Hookipa Pharma |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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