Correlation Between Lipocine and PACCAR
Can any of the company-specific risk be diversified away by investing in both Lipocine and PACCAR 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 PACCAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lipocine and PACCAR Inc, you can compare the effects of market volatilities on Lipocine and PACCAR 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 PACCAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipocine and PACCAR.
Diversification Opportunities for Lipocine and PACCAR
Weak diversification
The 3 months correlation between Lipocine and PACCAR is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and PACCAR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PACCAR Inc 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 PACCAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PACCAR Inc has no effect on the direction of Lipocine i.e., Lipocine and PACCAR go up and down completely randomly.
Pair Corralation between Lipocine and PACCAR
Given the investment horizon of 90 days Lipocine is expected to generate 3.48 times more return on investment than PACCAR. However, Lipocine is 3.48 times more volatile than PACCAR Inc. It trades about 0.04 of its potential returns per unit of risk. PACCAR Inc is currently generating about 0.07 per unit of risk. If you would invest 429.00 in Lipocine on September 12, 2024 and sell it today you would earn a total of 86.00 from holding Lipocine or generate 20.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lipocine vs. PACCAR Inc
Performance |
| Timeline |
| Lipocine |
| PACCAR Inc |
Lipocine and PACCAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lipocine and PACCAR
The main advantage of trading using opposite Lipocine and PACCAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lipocine position performs unexpectedly, PACCAR 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 PACCAR will offset losses from the drop in PACCAR'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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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