Correlation Between Lipocine and SAIHEAT
Can any of the company-specific risk be diversified away by investing in both Lipocine and SAIHEAT 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 SAIHEAT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lipocine and SAIHEAT Limited, you can compare the effects of market volatilities on Lipocine and SAIHEAT 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 SAIHEAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipocine and SAIHEAT.
Diversification Opportunities for Lipocine and SAIHEAT
Weak diversification
The 3 months correlation between Lipocine and SAIHEAT is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and SAIHEAT Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAIHEAT Limited 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 SAIHEAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAIHEAT Limited has no effect on the direction of Lipocine i.e., Lipocine and SAIHEAT go up and down completely randomly.
Pair Corralation between Lipocine and SAIHEAT
Given the investment horizon of 90 days Lipocine is expected to generate 10.15 times less return on investment than SAIHEAT. But when comparing it to its historical volatility, Lipocine is 4.23 times less risky than SAIHEAT. It trades about 0.03 of its potential returns per unit of risk. SAIHEAT Limited is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 25.00 in SAIHEAT Limited on August 30, 2024 and sell it today you would lose (13.91) from holding SAIHEAT Limited or give up 55.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 47.46% |
| Values | Daily Returns |
Lipocine vs. SAIHEAT Limited
Performance |
| Timeline |
| Lipocine |
| SAIHEAT Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Lipocine and SAIHEAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lipocine and SAIHEAT
The main advantage of trading using opposite Lipocine and SAIHEAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lipocine position performs unexpectedly, SAIHEAT 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 SAIHEAT will offset losses from the drop in SAIHEAT's long position.The idea behind Lipocine and SAIHEAT Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| SAIHEAT vs. Raymond James Financial | SAIHEAT vs. Virtu Financial | SAIHEAT vs. Lion Financial Group | SAIHEAT vs. The Charles Schwab |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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