Correlation Between Lipocine and Eastern
Can any of the company-specific risk be diversified away by investing in both Lipocine and Eastern 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 Eastern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lipocine and Eastern Co, you can compare the effects of market volatilities on Lipocine and Eastern 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 Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipocine and Eastern.
Diversification Opportunities for Lipocine and Eastern
Average diversification
The 3 months correlation between Lipocine and Eastern is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and Eastern Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern 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 Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern has no effect on the direction of Lipocine i.e., Lipocine and Eastern go up and down completely randomly.
Pair Corralation between Lipocine and Eastern
Given the investment horizon of 90 days Lipocine is expected to under-perform the Eastern. In addition to that, Lipocine is 2.39 times more volatile than Eastern Co. It trades about -0.13 of its total potential returns per unit of risk. Eastern Co is currently generating about -0.21 per unit of volatility. If you would invest 3,188 in Eastern Co on August 28, 2024 and sell it today you would lose (376.00) from holding Eastern Co or give up 11.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lipocine vs. Eastern Co
Performance |
| Timeline |
| Lipocine |
| Eastern |
Lipocine and Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lipocine and Eastern
The main advantage of trading using opposite Lipocine and Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lipocine position performs unexpectedly, Eastern 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 Eastern will offset losses from the drop in Eastern's long position.| Lipocine vs. Reviva Pharmaceuticals Holdings | Lipocine vs. ZyVersa Therapeutics | Lipocine vs. Unicycive Therapeutics | Lipocine vs. Checkpoint Therapeutics |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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