Correlation Between Lipocine and Zapata Computing
Can any of the company-specific risk be diversified away by investing in both Lipocine and Zapata Computing 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 Zapata Computing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lipocine and Zapata Computing Holdings, you can compare the effects of market volatilities on Lipocine and Zapata Computing 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 Zapata Computing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipocine and Zapata Computing.
Diversification Opportunities for Lipocine and Zapata Computing
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lipocine and Zapata is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and Zapata Computing Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zapata Computing Holdings 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 Zapata Computing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zapata Computing Holdings has no effect on the direction of Lipocine i.e., Lipocine and Zapata Computing go up and down completely randomly.
Pair Corralation between Lipocine and Zapata Computing
Given the investment horizon of 90 days Lipocine is expected to generate 0.44 times more return on investment than Zapata Computing. However, Lipocine is 2.26 times less risky than Zapata Computing. It trades about -0.13 of its potential returns per unit of risk. Zapata Computing Holdings is currently generating about -0.73 per unit of risk. If you would invest 557.00 in Lipocine on August 30, 2024 and sell it today you would lose (112.00) from holding Lipocine or give up 20.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 21.74% |
| Values | Daily Returns |
Lipocine vs. Zapata Computing Holdings
Performance |
| Timeline |
| Lipocine |
| Zapata Computing Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Lipocine and Zapata Computing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lipocine and Zapata Computing
The main advantage of trading using opposite Lipocine and Zapata Computing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lipocine position performs unexpectedly, Zapata Computing 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 Zapata Computing will offset losses from the drop in Zapata Computing's long position.| Lipocine vs. Reviva Pharmaceuticals Holdings | Lipocine vs. ZyVersa Therapeutics | Lipocine vs. Unicycive Therapeutics | Lipocine vs. Checkpoint Therapeutics |
| Zapata Computing vs. HE Equipment Services | Zapata Computing vs. First Ship Lease | Zapata Computing vs. Willscot Mobile Mini | Zapata Computing vs. Hertz Global Holdings |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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