Correlation Between Lipocine and PennantPark Investment
Can any of the company-specific risk be diversified away by investing in both Lipocine and PennantPark Investment 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 PennantPark Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lipocine and PennantPark Investment, you can compare the effects of market volatilities on Lipocine and PennantPark Investment 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 PennantPark Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipocine and PennantPark Investment.
Diversification Opportunities for Lipocine and PennantPark Investment
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lipocine and PennantPark is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and PennantPark Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Investment 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 PennantPark Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennantPark Investment has no effect on the direction of Lipocine i.e., Lipocine and PennantPark Investment go up and down completely randomly.
Pair Corralation between Lipocine and PennantPark Investment
Given the investment horizon of 90 days Lipocine is expected to under-perform the PennantPark Investment. In addition to that, Lipocine is 4.29 times more volatile than PennantPark Investment. It trades about -0.03 of its total potential returns per unit of risk. PennantPark Investment is currently generating about 0.02 per unit of volatility. If you would invest 695.00 in PennantPark Investment on August 27, 2024 and sell it today you would earn a total of 3.00 from holding PennantPark Investment or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lipocine vs. PennantPark Investment
Performance |
| Timeline |
| Lipocine |
| PennantPark Investment |
Lipocine and PennantPark Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lipocine and PennantPark Investment
The main advantage of trading using opposite Lipocine and PennantPark Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lipocine position performs unexpectedly, PennantPark Investment 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 PennantPark Investment will offset losses from the drop in PennantPark Investment's long position.| Lipocine vs. Reviva Pharmaceuticals Holdings | Lipocine vs. ZyVersa Therapeutics | Lipocine vs. Unicycive Therapeutics | Lipocine vs. Checkpoint Therapeutics |
| PennantPark Investment vs. PowerUp Acquisition Corp | PennantPark Investment vs. Aurora Innovation | PennantPark Investment vs. HUMANA INC | PennantPark Investment vs. Aquagold International |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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