Correlation Between Lipocine and China Aircraft
Can any of the company-specific risk be diversified away by investing in both Lipocine and China Aircraft 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 China Aircraft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lipocine and China Aircraft Leasing, you can compare the effects of market volatilities on Lipocine and China Aircraft 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 China Aircraft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipocine and China Aircraft.
Diversification Opportunities for Lipocine and China Aircraft
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lipocine and China is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and China Aircraft Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Aircraft Leasing 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 China Aircraft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Aircraft Leasing has no effect on the direction of Lipocine i.e., Lipocine and China Aircraft go up and down completely randomly.
Pair Corralation between Lipocine and China Aircraft
If you would invest 40.00 in China Aircraft Leasing on August 30, 2024 and sell it today you would earn a total of 0.00 from holding China Aircraft Leasing or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lipocine vs. China Aircraft Leasing
Performance |
| Timeline |
| Lipocine |
| China Aircraft Leasing |
Lipocine and China Aircraft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lipocine and China Aircraft
The main advantage of trading using opposite Lipocine and China Aircraft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lipocine position performs unexpectedly, China Aircraft 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 China Aircraft will offset losses from the drop in China Aircraft's long position.The idea behind Lipocine and China Aircraft Leasing pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| China Aircraft vs. Yuexiu Transport Infrastructure | China Aircraft vs. Ihuman Inc | China Aircraft vs. One Liberty Properties | China Aircraft vs. Hafnia Limited |
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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