Correlation Between Freedom Holding and Lipocine
Can any of the company-specific risk be diversified away by investing in both Freedom Holding 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 Freedom Holding and Lipocine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Freedom Holding Corp and Lipocine, you can compare the effects of market volatilities on Freedom Holding 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 Freedom Holding with a short position of Lipocine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom Holding and Lipocine.
Diversification Opportunities for Freedom Holding and Lipocine
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Freedom and Lipocine is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Freedom Holding Corp and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and Freedom Holding 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 Freedom Holding Corp 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 Freedom Holding i.e., Freedom Holding and Lipocine go up and down completely randomly.
Pair Corralation between Freedom Holding and Lipocine
Given the investment horizon of 90 days Freedom Holding Corp is expected to generate 0.3 times more return on investment than Lipocine. However, Freedom Holding Corp is 3.3 times less risky than Lipocine. It trades about 0.24 of its potential returns per unit of risk. Lipocine is currently generating about -0.12 per unit of risk. If you would invest 10,840 in Freedom Holding Corp on September 1, 2024 and sell it today you would earn a total of 1,048 from holding Freedom Holding Corp or generate 9.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Freedom Holding Corp vs. Lipocine
Performance |
| Timeline |
| Freedom Holding Corp |
| Lipocine |
Freedom Holding and Lipocine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freedom Holding and Lipocine
The main advantage of trading using opposite Freedom Holding and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freedom Holding 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.| Freedom Holding vs. Nomura Holdings ADR | Freedom Holding vs. Scully Royalty | Freedom Holding vs. Oppenheimer Holdings | Freedom Holding vs. Houlihan Lokey |
| 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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