Correlation Between Lipocine and Trevena
Can any of the company-specific risk be diversified away by investing in both Lipocine and Trevena 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 Trevena into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lipocine and Trevena, you can compare the effects of market volatilities on Lipocine and Trevena 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 Trevena. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipocine and Trevena.
Diversification Opportunities for Lipocine and Trevena
Good diversification
The 3 months correlation between Lipocine and Trevena is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and Trevena in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trevena 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 Trevena. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trevena has no effect on the direction of Lipocine i.e., Lipocine and Trevena go up and down completely randomly.
Pair Corralation between Lipocine and Trevena
Given the investment horizon of 90 days Lipocine is expected to generate 1.41 times less return on investment than Trevena. But when comparing it to its historical volatility, Lipocine is 3.58 times less risky than Trevena. It trades about 0.01 of its potential returns per unit of risk. Trevena is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 4,675 in Trevena on September 2, 2024 and sell it today you would lose (4,477) from holding Trevena or give up 95.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.35% |
| Values | Daily Returns |
Lipocine vs. Trevena
Performance |
| Timeline |
| Lipocine |
| Trevena |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lipocine and Trevena Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lipocine and Trevena
The main advantage of trading using opposite Lipocine and Trevena positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lipocine position performs unexpectedly, Trevena 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 Trevena will offset losses from the drop in Trevena'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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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