Correlation Between East Africa and Lipocine
Can any of the company-specific risk be diversified away by investing in both East Africa 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 East Africa and Lipocine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between East Africa Metals and Lipocine, you can compare the effects of market volatilities on East Africa 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 East Africa with a short position of Lipocine. Check out your portfolio center. Please also check ongoing floating volatility patterns of East Africa and Lipocine.
Diversification Opportunities for East Africa and Lipocine
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between East and Lipocine is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding East Africa Metals and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and East Africa 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 East Africa Metals 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 East Africa i.e., East Africa and Lipocine go up and down completely randomly.
Pair Corralation between East Africa and Lipocine
Assuming the 90 days horizon East Africa Metals is expected to generate 9.11 times more return on investment than Lipocine. However, East Africa is 9.11 times more volatile than Lipocine. It trades about 0.08 of its potential returns per unit of risk. Lipocine is currently generating about 0.03 per unit of risk. If you would invest 1.10 in East Africa Metals on September 12, 2024 and sell it today you would earn a total of 9.90 from holding East Africa Metals or generate 900.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
East Africa Metals vs. Lipocine
Performance |
| Timeline |
| East Africa Metals |
| Lipocine |
East Africa and Lipocine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East Africa and Lipocine
The main advantage of trading using opposite East Africa and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East Africa 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.| East Africa vs. Advantage Solutions | East Africa vs. Atlas Corp | East Africa vs. PureCycle Technologies | East Africa vs. WM Technology |
| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |