Correlation Between Lipocine and Digi International
Can any of the company-specific risk be diversified away by investing in both Lipocine and Digi International 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 Digi International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lipocine and Digi International, you can compare the effects of market volatilities on Lipocine and Digi International 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 Digi International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipocine and Digi International.
Diversification Opportunities for Lipocine and Digi International
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lipocine and Digi is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and Digi International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digi International 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 Digi International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digi International has no effect on the direction of Lipocine i.e., Lipocine and Digi International go up and down completely randomly.
Pair Corralation between Lipocine and Digi International
Given the investment horizon of 90 days Lipocine is expected to under-perform the Digi International. In addition to that, Lipocine is 2.22 times more volatile than Digi International. It trades about -0.02 of its total potential returns per unit of risk. Digi International is currently generating about 0.1 per unit of volatility. If you would invest 2,385 in Digi International on August 30, 2024 and sell it today you would earn a total of 882.00 from holding Digi International or generate 36.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lipocine vs. Digi International
Performance |
| Timeline |
| Lipocine |
| Digi International |
Lipocine and Digi International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lipocine and Digi International
The main advantage of trading using opposite Lipocine and Digi International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lipocine position performs unexpectedly, Digi International 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 Digi International will offset losses from the drop in Digi International's long position.| Lipocine vs. Reviva Pharmaceuticals Holdings | Lipocine vs. ZyVersa Therapeutics | Lipocine vs. Unicycive Therapeutics | Lipocine vs. Checkpoint Therapeutics |
| Digi International vs. Extreme Networks | Digi International vs. Ciena Corp | Digi International vs. Harmonic | Digi International vs. Comtech Telecommunications 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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