Correlation Between Lipocine and SunLink Health
Can any of the company-specific risk be diversified away by investing in both Lipocine and SunLink 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 SunLink Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lipocine and SunLink Health Systems, you can compare the effects of market volatilities on Lipocine and SunLink 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 SunLink Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipocine and SunLink Health.
Diversification Opportunities for Lipocine and SunLink Health
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lipocine and SunLink is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and SunLink Health Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunLink Health Systems 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 SunLink Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunLink Health Systems has no effect on the direction of Lipocine i.e., Lipocine and SunLink Health go up and down completely randomly.
Pair Corralation between Lipocine and SunLink Health
Given the investment horizon of 90 days Lipocine is expected to generate 1.41 times more return on investment than SunLink Health. However, Lipocine is 1.41 times more volatile than SunLink Health Systems. It trades about -0.06 of its potential returns per unit of risk. SunLink Health Systems is currently generating about -0.21 per unit of risk. If you would invest 577.00 in Lipocine on August 26, 2024 and sell it today you would lose (62.00) from holding Lipocine or give up 10.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lipocine vs. SunLink Health Systems
Performance |
| Timeline |
| Lipocine |
| SunLink Health Systems |
Lipocine and SunLink Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lipocine and SunLink Health
The main advantage of trading using opposite Lipocine and SunLink Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lipocine position performs unexpectedly, SunLink 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 SunLink Health will offset losses from the drop in SunLink Health's long position.| Lipocine vs. Reviva Pharmaceuticals Holdings | Lipocine vs. ZyVersa Therapeutics | Lipocine vs. Unicycive Therapeutics | Lipocine vs. Checkpoint Therapeutics |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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