Correlation Between Seres Therapeutics and Lipocine
Can any of the company-specific risk be diversified away by investing in both Seres Therapeutics 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 Seres Therapeutics and Lipocine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seres Therapeutics and Lipocine, you can compare the effects of market volatilities on Seres Therapeutics 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 Seres Therapeutics with a short position of Lipocine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seres Therapeutics and Lipocine.
Diversification Opportunities for Seres Therapeutics and Lipocine
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seres and Lipocine is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Seres Therapeutics and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and Seres Therapeutics 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 Seres Therapeutics 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 Seres Therapeutics i.e., Seres Therapeutics and Lipocine go up and down completely randomly.
Pair Corralation between Seres Therapeutics and Lipocine
Given the investment horizon of 90 days Seres Therapeutics is expected to generate 1.3 times more return on investment than Lipocine. However, Seres Therapeutics is 1.3 times more volatile than Lipocine. It trades about 0.03 of its potential returns per unit of risk. Lipocine is currently generating about -0.02 per unit of risk. If you would invest 114.00 in Seres Therapeutics on September 3, 2024 and sell it today you would lose (16.00) from holding Seres Therapeutics or give up 14.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seres Therapeutics vs. Lipocine
Performance |
| Timeline |
| Seres Therapeutics |
| Lipocine |
Seres Therapeutics and Lipocine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seres Therapeutics and Lipocine
The main advantage of trading using opposite Seres Therapeutics and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seres Therapeutics 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.| Seres Therapeutics vs. DiaMedica Therapeutics | Seres Therapeutics vs. Lyra Therapeutics | Seres Therapeutics vs. Centessa Pharmaceuticals PLC |
| Lipocine vs. DiaMedica Therapeutics | Lipocine vs. Lyra Therapeutics | Lipocine vs. Centessa Pharmaceuticals PLC |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |