Correlation Between KNOT Offshore and Lipocine
Can any of the company-specific risk be diversified away by investing in both KNOT Offshore 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 KNOT Offshore and Lipocine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KNOT Offshore Partners and Lipocine, you can compare the effects of market volatilities on KNOT Offshore 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 KNOT Offshore with a short position of Lipocine. Check out your portfolio center. Please also check ongoing floating volatility patterns of KNOT Offshore and Lipocine.
Diversification Opportunities for KNOT Offshore and Lipocine
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KNOT and Lipocine is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding KNOT Offshore Partners and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and KNOT Offshore 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 KNOT Offshore Partners 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 KNOT Offshore i.e., KNOT Offshore and Lipocine go up and down completely randomly.
Pair Corralation between KNOT Offshore and Lipocine
Given the investment horizon of 90 days KNOT Offshore Partners is expected to generate 0.45 times more return on investment than Lipocine. However, KNOT Offshore Partners is 2.23 times less risky than Lipocine. It trades about -0.05 of its potential returns per unit of risk. Lipocine is currently generating about -0.02 per unit of risk. If you would invest 730.00 in KNOT Offshore Partners on September 2, 2024 and sell it today you would lose (147.00) from holding KNOT Offshore Partners or give up 20.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KNOT Offshore Partners vs. Lipocine
Performance |
| Timeline |
| KNOT Offshore Partners |
| Lipocine |
KNOT Offshore and Lipocine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KNOT Offshore and Lipocine
The main advantage of trading using opposite KNOT Offshore and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KNOT Offshore 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.| KNOT Offshore vs. USA Compression Partners | KNOT Offshore vs. Dynagas LNG Partners | KNOT Offshore vs. Crossamerica Partners LP | KNOT Offshore vs. Delek Logistics Partners |
| 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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