Correlation Between Lipocine and Playtech Plc
Can any of the company-specific risk be diversified away by investing in both Lipocine and Playtech Plc 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 Playtech Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lipocine and Playtech plc, you can compare the effects of market volatilities on Lipocine and Playtech Plc 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 Playtech Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipocine and Playtech Plc.
Diversification Opportunities for Lipocine and Playtech Plc
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lipocine and Playtech is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and Playtech plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playtech plc 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 Playtech Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playtech plc has no effect on the direction of Lipocine i.e., Lipocine and Playtech Plc go up and down completely randomly.
Pair Corralation between Lipocine and Playtech Plc
Given the investment horizon of 90 days Lipocine is expected to generate 2.34 times more return on investment than Playtech Plc. However, Lipocine is 2.34 times more volatile than Playtech plc. It trades about 0.07 of its potential returns per unit of risk. Playtech plc is currently generating about 0.12 per unit of risk. If you would invest 260.00 in Lipocine on September 1, 2024 and sell it today you would earn a total of 194.00 from holding Lipocine or generate 74.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lipocine vs. Playtech plc
Performance |
| Timeline |
| Lipocine |
| Playtech plc |
Lipocine and Playtech Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lipocine and Playtech Plc
The main advantage of trading using opposite Lipocine and Playtech Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lipocine position performs unexpectedly, Playtech Plc 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 Playtech Plc will offset losses from the drop in Playtech Plc's long position.| Lipocine vs. Reviva Pharmaceuticals Holdings | Lipocine vs. ZyVersa Therapeutics | Lipocine vs. Unicycive Therapeutics | Lipocine vs. Checkpoint Therapeutics |
| Playtech Plc vs. Fidus Investment Corp | Playtech Plc vs. BTB Real Estate | Playtech Plc vs. Bridgford Foods | Playtech Plc vs. Aegon NV ADR |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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