Correlation Between Lipocine and Connecticut Light
Can any of the company-specific risk be diversified away by investing in both Lipocine and Connecticut Light 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 Connecticut Light into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lipocine and The Connecticut Light, you can compare the effects of market volatilities on Lipocine and Connecticut Light 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 Connecticut Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipocine and Connecticut Light.
Diversification Opportunities for Lipocine and Connecticut Light
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lipocine and Connecticut is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and The Connecticut Light in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Connecticut Light 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 Connecticut Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Connecticut Light has no effect on the direction of Lipocine i.e., Lipocine and Connecticut Light go up and down completely randomly.
Pair Corralation between Lipocine and Connecticut Light
Given the investment horizon of 90 days Lipocine is expected to under-perform the Connecticut Light. In addition to that, Lipocine is 6.12 times more volatile than The Connecticut Light. It trades about -0.21 of its total potential returns per unit of risk. The Connecticut Light is currently generating about -0.37 per unit of volatility. If you would invest 3,585 in The Connecticut Light on September 3, 2024 and sell it today you would lose (254.00) from holding The Connecticut Light or give up 7.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lipocine vs. The Connecticut Light
Performance |
| Timeline |
| Lipocine |
| Connecticut Light |
Lipocine and Connecticut Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lipocine and Connecticut Light
The main advantage of trading using opposite Lipocine and Connecticut Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lipocine position performs unexpectedly, Connecticut Light 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 Connecticut Light will offset losses from the drop in Connecticut Light's long position.| Lipocine vs. DiaMedica Therapeutics | Lipocine vs. Lyra Therapeutics | Lipocine vs. Centessa Pharmaceuticals PLC |
| Connecticut Light vs. Marine Products | Connecticut Light vs. U Power Limited | Connecticut Light vs. BRP Inc | Connecticut Light vs. Mayfair Gold Corp |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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