Correlation Between Lipocine and Topbuild Corp
Can any of the company-specific risk be diversified away by investing in both Lipocine and Topbuild Corp 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 Topbuild Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lipocine and Topbuild Corp, you can compare the effects of market volatilities on Lipocine and Topbuild Corp 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 Topbuild Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipocine and Topbuild Corp.
Diversification Opportunities for Lipocine and Topbuild Corp
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lipocine and Topbuild is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and Topbuild Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Topbuild Corp 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 Topbuild Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Topbuild Corp has no effect on the direction of Lipocine i.e., Lipocine and Topbuild Corp go up and down completely randomly.
Pair Corralation between Lipocine and Topbuild Corp
Given the investment horizon of 90 days Lipocine is expected to under-perform the Topbuild Corp. In addition to that, Lipocine is 2.22 times more volatile than Topbuild Corp. It trades about -0.02 of its total potential returns per unit of risk. Topbuild Corp is currently generating about 0.0 per unit of volatility. If you would invest 41,370 in Topbuild Corp on September 3, 2024 and sell it today you would lose (2,429) from holding Topbuild Corp or give up 5.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lipocine vs. Topbuild Corp
Performance |
| Timeline |
| Lipocine |
| Topbuild Corp |
Lipocine and Topbuild Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lipocine and Topbuild Corp
The main advantage of trading using opposite Lipocine and Topbuild Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lipocine position performs unexpectedly, Topbuild Corp 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 Topbuild Corp will offset losses from the drop in Topbuild Corp's long position.| Lipocine vs. DiaMedica Therapeutics | Lipocine vs. Lyra Therapeutics | Lipocine vs. Centessa Pharmaceuticals PLC |
| Topbuild Corp vs. MYR Group | Topbuild Corp vs. Comfort Systems USA | Topbuild Corp vs. Arcosa Inc | Topbuild Corp vs. EMCOR Group |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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