Correlation Between Nabors Industries and Lipocine
Can any of the company-specific risk be diversified away by investing in both Nabors Industries 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 Nabors Industries and Lipocine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nabors Industries and Lipocine, you can compare the effects of market volatilities on Nabors Industries 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 Nabors Industries with a short position of Lipocine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nabors Industries and Lipocine.
Diversification Opportunities for Nabors Industries and Lipocine
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nabors and Lipocine is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Nabors Industries and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and Nabors Industries 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 Nabors Industries 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 Nabors Industries i.e., Nabors Industries and Lipocine go up and down completely randomly.
Pair Corralation between Nabors Industries and Lipocine
Considering the 90-day investment horizon Nabors Industries is expected to under-perform the Lipocine. But the stock apears to be less risky and, when comparing its historical volatility, Nabors Industries is 1.95 times less risky than Lipocine. The stock trades about -0.41 of its potential returns per unit of risk. The Lipocine is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 533.00 in Lipocine on September 12, 2024 and sell it today you would lose (13.00) from holding Lipocine or give up 2.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nabors Industries vs. Lipocine
Performance |
| Timeline |
| Nabors Industries |
| Lipocine |
Nabors Industries and Lipocine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nabors Industries and Lipocine
The main advantage of trading using opposite Nabors Industries and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nabors Industries 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.| Nabors Industries vs. Helmerich and Payne | Nabors Industries vs. Precision Drilling | Nabors Industries vs. Seadrill Limited | Nabors Industries vs. Borr Drilling |
| 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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