Correlation Between Lipocine and Academy Sports
Can any of the company-specific risk be diversified away by investing in both Lipocine and Academy Sports 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 Academy Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lipocine and Academy Sports Outdoors, you can compare the effects of market volatilities on Lipocine and Academy Sports 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 Academy Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipocine and Academy Sports.
Diversification Opportunities for Lipocine and Academy Sports
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lipocine and Academy is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and Academy Sports Outdoors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Academy Sports Outdoors 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 Academy Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Academy Sports Outdoors has no effect on the direction of Lipocine i.e., Lipocine and Academy Sports go up and down completely randomly.
Pair Corralation between Lipocine and Academy Sports
Given the investment horizon of 90 days Lipocine is expected to generate 2.31 times more return on investment than Academy Sports. However, Lipocine is 2.31 times more volatile than Academy Sports Outdoors. It trades about 0.02 of its potential returns per unit of risk. Academy Sports Outdoors is currently generating about 0.02 per unit of risk. If you would invest 682.00 in Lipocine on September 19, 2024 and sell it today you would lose (161.00) from holding Lipocine or give up 23.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lipocine vs. Academy Sports Outdoors
Performance |
| Timeline |
| Lipocine |
| Academy Sports Outdoors |
Lipocine and Academy Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lipocine and Academy Sports
The main advantage of trading using opposite Lipocine and Academy Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lipocine position performs unexpectedly, Academy Sports 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 Academy Sports will offset losses from the drop in Academy Sports' long position.| Lipocine vs. Emergent Biosolutions | Lipocine vs. Neurocrine Biosciences | Lipocine vs. Teva Pharma Industries | Lipocine vs. Haleon plc |
| Academy Sports vs. Williams Sonoma | Academy Sports vs. AutoZone | Academy Sports vs. Ulta Beauty | Academy Sports vs. Best Buy Co |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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