Correlation Between Lipocine and Crinetics Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Lipocine and Crinetics Pharmaceuticals 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 Crinetics Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lipocine and Crinetics Pharmaceuticals, you can compare the effects of market volatilities on Lipocine and Crinetics Pharmaceuticals 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 Crinetics Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipocine and Crinetics Pharmaceuticals.
Diversification Opportunities for Lipocine and Crinetics Pharmaceuticals
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lipocine and Crinetics is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and Crinetics Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crinetics Pharmaceuticals 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 Crinetics Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crinetics Pharmaceuticals has no effect on the direction of Lipocine i.e., Lipocine and Crinetics Pharmaceuticals go up and down completely randomly.
Pair Corralation between Lipocine and Crinetics Pharmaceuticals
Given the investment horizon of 90 days Lipocine is expected to generate 1.86 times more return on investment than Crinetics Pharmaceuticals. However, Lipocine is 1.86 times more volatile than Crinetics Pharmaceuticals. It trades about 0.06 of its potential returns per unit of risk. Crinetics Pharmaceuticals is currently generating about -0.04 per unit of risk. If you would invest 510.00 in Lipocine on September 13, 2024 and sell it today you would earn a total of 21.00 from holding Lipocine or generate 4.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lipocine vs. Crinetics Pharmaceuticals
Performance |
| Timeline |
| Lipocine |
| Crinetics Pharmaceuticals |
Lipocine and Crinetics Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lipocine and Crinetics Pharmaceuticals
The main advantage of trading using opposite Lipocine and Crinetics Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lipocine position performs unexpectedly, Crinetics Pharmaceuticals 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 Crinetics Pharmaceuticals will offset losses from the drop in Crinetics Pharmaceuticals' long position.| Lipocine vs. Emergent Biosolutions | Lipocine vs. Bausch Health Companies | Lipocine vs. Neurocrine Biosciences | Lipocine vs. Teva Pharma Industries |
| Crinetics Pharmaceuticals vs. Viridian Therapeutics | Crinetics Pharmaceuticals vs. Cytokinetics | Crinetics Pharmaceuticals vs. Structure Therapeutics American | Crinetics Pharmaceuticals vs. Passage Bio |
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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