Correlation Between Lipocine and STATE

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Can any of the company-specific risk be diversified away by investing in both Lipocine and STATE 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 STATE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lipocine and STATE STREET P, you can compare the effects of market volatilities on Lipocine and STATE 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 STATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipocine and STATE.

Diversification Opportunities for Lipocine and STATE

-0.33
  Correlation Coefficient

Very good diversification

The 3 months correlation between Lipocine and STATE is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and STATE STREET P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STATE STREET P 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 STATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STATE STREET P has no effect on the direction of Lipocine i.e., Lipocine and STATE go up and down completely randomly.

Pair Corralation between Lipocine and STATE

Given the investment horizon of 90 days Lipocine is expected to generate 3.63 times more return on investment than STATE. However, Lipocine is 3.63 times more volatile than STATE STREET P. It trades about -0.01 of its potential returns per unit of risk. STATE STREET P is currently generating about -0.15 per unit of risk. If you would invest  533.00  in Lipocine on September 12, 2024 and sell it today you would lose (18.00) from holding Lipocine or give up 3.38% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Lipocine  vs.  STATE STREET P

 Performance 
       Timeline  
Lipocine 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Lipocine are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Lipocine displayed solid returns over the last few months and may actually be approaching a breakup point.
STATE STREET P 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days STATE STREET P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for STATE STREET P investors.

Lipocine and STATE Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lipocine and STATE

The main advantage of trading using opposite Lipocine and STATE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lipocine position performs unexpectedly, STATE 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 STATE will offset losses from the drop in STATE's long position.
The idea behind Lipocine and STATE STREET P 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.
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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