Correlation Between Lipocine and Senmiao Technology
Can any of the company-specific risk be diversified away by investing in both Lipocine and Senmiao Technology 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 Lipocine and Senmiao Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lipocine and Senmiao Technology, you can compare the effects of market volatilities on Lipocine and Senmiao Technology 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 Lipocine with a short position of Senmiao Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipocine and Senmiao Technology.
Diversification Opportunities for Lipocine and Senmiao Technology
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lipocine and Senmiao is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and Senmiao Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senmiao Technology and Lipocine 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 Lipocine are associated (or correlated) with Senmiao Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senmiao Technology has no effect on the direction of Lipocine i.e., Lipocine and Senmiao Technology go up and down completely randomly.
Pair Corralation between Lipocine and Senmiao Technology
Given the investment horizon of 90 days Lipocine is expected to under-perform the Senmiao Technology. In addition to that, Lipocine is 1.44 times more volatile than Senmiao Technology. It trades about -0.05 of its total potential returns per unit of risk. Senmiao Technology is currently generating about 0.12 per unit of volatility. If you would invest 85.00 in Senmiao Technology on August 25, 2024 and sell it today you would earn a total of 8.00 from holding Senmiao Technology or generate 9.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lipocine vs. Senmiao Technology
Performance |
| Timeline |
| Lipocine |
| Senmiao Technology |
Lipocine and Senmiao Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lipocine and Senmiao Technology
The main advantage of trading using opposite Lipocine and Senmiao Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lipocine position performs unexpectedly, Senmiao Technology 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 Senmiao Technology will offset losses from the drop in Senmiao Technology's long position.| Lipocine vs. Capricor Therapeutics | Lipocine vs. Akari Therapeutics PLC | Lipocine vs. Soleno Therapeutics | Lipocine vs. Bio Path Holdings |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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