Correlation Between Coca Cola and Lipocine
Can any of the company-specific risk be diversified away by investing in both Coca Cola 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 Coca Cola and Lipocine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Coca Cola and Lipocine, you can compare the effects of market volatilities on Coca Cola 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 Coca Cola with a short position of Lipocine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Lipocine.
Diversification Opportunities for Coca Cola and Lipocine
Excellent diversification
The 3 months correlation between Coca and Lipocine is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and Coca Cola 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 The Coca Cola 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 Coca Cola i.e., Coca Cola and Lipocine go up and down completely randomly.
Pair Corralation between Coca Cola and Lipocine
Allowing for the 90-day total investment horizon The Coca Cola is expected to under-perform the Lipocine. But the stock apears to be less risky and, when comparing its historical volatility, The Coca Cola is 6.41 times less risky than Lipocine. The stock trades about -0.31 of its potential returns per unit of risk. The Lipocine is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 548.00 in Lipocine on August 24, 2024 and sell it today you would lose (48.00) from holding Lipocine or give up 8.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. Lipocine
Performance |
| Timeline |
| Coca Cola |
| Lipocine |
Coca Cola and Lipocine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Lipocine
The main advantage of trading using opposite Coca Cola and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola 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.| Coca Cola vs. Keurig Dr Pepper | Coca Cola vs. Eshallgo Class A | Coca Cola vs. Amtech Systems | Coca Cola vs. Gold Fields Ltd |
| 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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