Correlation Between Lipocine and Skylight Health
Can any of the company-specific risk be diversified away by investing in both Lipocine and Skylight Health 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 Skylight Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lipocine and Skylight Health Group, you can compare the effects of market volatilities on Lipocine and Skylight Health 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 Skylight Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipocine and Skylight Health.
Diversification Opportunities for Lipocine and Skylight Health
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lipocine and Skylight is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and Skylight Health Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skylight Health Group 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 Skylight Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skylight Health Group has no effect on the direction of Lipocine i.e., Lipocine and Skylight Health go up and down completely randomly.
Pair Corralation between Lipocine and Skylight Health
Given the investment horizon of 90 days Lipocine is expected to generate 202.99 times less return on investment than Skylight Health. But when comparing it to its historical volatility, Lipocine is 54.58 times less risky than Skylight Health. It trades about 0.07 of its potential returns per unit of risk. Skylight Health Group is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Skylight Health Group on September 14, 2024 and sell it today you would lose (0.01) from holding Skylight Health Group or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 8.43% |
| Values | Daily Returns |
Lipocine vs. Skylight Health Group
Performance |
| Timeline |
| Lipocine |
| Skylight Health Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lipocine and Skylight Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lipocine and Skylight Health
The main advantage of trading using opposite Lipocine and Skylight Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lipocine position performs unexpectedly, Skylight Health 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 Skylight Health will offset losses from the drop in Skylight Health's long position.| Lipocine vs. Reviva Pharmaceuticals Holdings | Lipocine vs. ZyVersa Therapeutics | Lipocine vs. Unicycive Therapeutics | Lipocine vs. Checkpoint Therapeutics |
| Skylight Health vs. Teradyne | Skylight Health vs. Micron Technology | Skylight Health vs. Triton International Limited | Skylight Health vs. Globalfoundries |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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