Correlation Between Emergent Biosolutions and Lipocine
Can any of the company-specific risk be diversified away by investing in both Emergent Biosolutions 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 Emergent Biosolutions and Lipocine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emergent Biosolutions and Lipocine, you can compare the effects of market volatilities on Emergent Biosolutions 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 Emergent Biosolutions with a short position of Lipocine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emergent Biosolutions and Lipocine.
Diversification Opportunities for Emergent Biosolutions and Lipocine
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Emergent and Lipocine is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Emergent Biosolutions and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and Emergent Biosolutions 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 Emergent Biosolutions 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 Emergent Biosolutions i.e., Emergent Biosolutions and Lipocine go up and down completely randomly.
Pair Corralation between Emergent Biosolutions and Lipocine
Considering the 90-day investment horizon Emergent Biosolutions is expected to under-perform the Lipocine. In addition to that, Emergent Biosolutions is 1.26 times more volatile than Lipocine. It trades about -0.09 of its total potential returns per unit of risk. Lipocine is currently generating about 0.04 per unit of volatility. If you would invest 518.00 in Lipocine on September 14, 2024 and sell it today you would earn a total of 8.00 from holding Lipocine or generate 1.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emergent Biosolutions vs. Lipocine
Performance |
| Timeline |
| Emergent Biosolutions |
| Lipocine |
Emergent Biosolutions and Lipocine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emergent Biosolutions and Lipocine
The main advantage of trading using opposite Emergent Biosolutions and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emergent Biosolutions 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.| Emergent Biosolutions vs. Zoetis Inc | Emergent Biosolutions vs. Bausch Health Companies | Emergent Biosolutions vs. Neurocrine Biosciences | Emergent Biosolutions vs. Akanda Corp |
| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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