Correlation Between Microbot Medical and Lipocine
Can any of the company-specific risk be diversified away by investing in both Microbot Medical and Lipocine 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 Microbot Medical and Lipocine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microbot Medical and Lipocine, you can compare the effects of market volatilities on Microbot Medical and Lipocine 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 Microbot Medical with a short position of Lipocine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microbot Medical and Lipocine.
Diversification Opportunities for Microbot Medical and Lipocine
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Microbot and Lipocine is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Microbot Medical and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and Microbot Medical 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 Microbot Medical are associated (or correlated) with Lipocine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lipocine has no effect on the direction of Microbot Medical i.e., Microbot Medical and Lipocine go up and down completely randomly.
Pair Corralation between Microbot Medical and Lipocine
Given the investment horizon of 90 days Microbot Medical is expected to generate 0.45 times more return on investment than Lipocine. However, Microbot Medical is 2.24 times less risky than Lipocine. It trades about 0.05 of its potential returns per unit of risk. Lipocine is currently generating about -0.13 per unit of risk. If you would invest 97.00 in Microbot Medical on August 28, 2024 and sell it today you would earn a total of 2.00 from holding Microbot Medical or generate 2.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microbot Medical vs. Lipocine
Performance |
| Timeline |
| Microbot Medical |
| Lipocine |
Microbot Medical and Lipocine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microbot Medical and Lipocine
The main advantage of trading using opposite Microbot Medical and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microbot Medical position performs unexpectedly, Lipocine 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 Lipocine will offset losses from the drop in Lipocine's long position.The idea behind Microbot Medical and Lipocine 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.| 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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