Correlation Between JD Sports and Lipocine
Can any of the company-specific risk be diversified away by investing in both JD Sports 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 JD Sports and Lipocine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JD Sports Fashion and Lipocine, you can compare the effects of market volatilities on JD Sports 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 JD Sports with a short position of Lipocine. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Sports and Lipocine.
Diversification Opportunities for JD Sports and Lipocine
Very weak diversification
The 3 months correlation between JDDSF and Lipocine is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding JD Sports Fashion and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and JD Sports 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 JD Sports Fashion 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 JD Sports i.e., JD Sports and Lipocine go up and down completely randomly.
Pair Corralation between JD Sports and Lipocine
Assuming the 90 days horizon JD Sports Fashion is expected to under-perform the Lipocine. But the pink sheet apears to be less risky and, when comparing its historical volatility, JD Sports Fashion is 1.53 times less risky than Lipocine. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Lipocine is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 449.00 in Lipocine on August 31, 2024 and sell it today you would earn a total of 5.00 from holding Lipocine or generate 1.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.78% |
| Values | Daily Returns |
JD Sports Fashion vs. Lipocine
Performance |
| Timeline |
| JD Sports Fashion |
| Lipocine |
JD Sports and Lipocine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Sports and Lipocine
The main advantage of trading using opposite JD Sports and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Sports 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.The idea behind JD Sports Fashion and Lipocine pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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