Correlation Between Lipocine and SNDL
Can any of the company-specific risk be diversified away by investing in both Lipocine and SNDL 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 SNDL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lipocine and SNDL Inc, you can compare the effects of market volatilities on Lipocine and SNDL 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 SNDL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipocine and SNDL.
Diversification Opportunities for Lipocine and SNDL
Weak diversification
The 3 months correlation between Lipocine and SNDL is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL 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 SNDL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNDL Inc has no effect on the direction of Lipocine i.e., Lipocine and SNDL go up and down completely randomly.
Pair Corralation between Lipocine and SNDL
Given the investment horizon of 90 days Lipocine is expected to generate 1.38 times more return on investment than SNDL. However, Lipocine is 1.38 times more volatile than SNDL Inc. It trades about -0.05 of its potential returns per unit of risk. SNDL Inc is currently generating about -0.08 per unit of risk. If you would invest 555.00 in Lipocine on August 28, 2024 and sell it today you would lose (54.00) from holding Lipocine or give up 9.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lipocine vs. SNDL Inc
Performance |
| Timeline |
| Lipocine |
| SNDL Inc |
Lipocine and SNDL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lipocine and SNDL
The main advantage of trading using opposite Lipocine and SNDL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lipocine position performs unexpectedly, SNDL 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 SNDL will offset losses from the drop in SNDL's long position.| Lipocine vs. Capricor Therapeutics | Lipocine vs. Soleno Therapeutics | Lipocine vs. Bio Path Holdings | Lipocine vs. Moleculin Biotech |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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