Correlation Between PacifiCorp and Lipocine
Can any of the company-specific risk be diversified away by investing in both PacifiCorp 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 PacifiCorp and Lipocine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PacifiCorp and Lipocine, you can compare the effects of market volatilities on PacifiCorp 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 PacifiCorp with a short position of Lipocine. Check out your portfolio center. Please also check ongoing floating volatility patterns of PacifiCorp and Lipocine.
Diversification Opportunities for PacifiCorp and Lipocine
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PacifiCorp and Lipocine is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding PacifiCorp and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and PacifiCorp 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 PacifiCorp 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 PacifiCorp i.e., PacifiCorp and Lipocine go up and down completely randomly.
Pair Corralation between PacifiCorp and Lipocine
Assuming the 90 days horizon PacifiCorp is expected to under-perform the Lipocine. But the pink sheet apears to be less risky and, when comparing its historical volatility, PacifiCorp is 2.07 times less risky than Lipocine. The pink sheet trades about -0.07 of its potential returns per unit of risk. The Lipocine is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 510.00 in Lipocine on September 13, 2024 and sell it today you would earn a total of 21.00 from holding Lipocine or generate 4.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
PacifiCorp vs. Lipocine
Performance |
| Timeline |
| PacifiCorp |
| Lipocine |
PacifiCorp and Lipocine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PacifiCorp and Lipocine
The main advantage of trading using opposite PacifiCorp and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PacifiCorp 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.| PacifiCorp vs. Emerson Electric | PacifiCorp vs. Cementos Pacasmayo SAA | PacifiCorp vs. Tyson Foods | PacifiCorp vs. Taiwan Semiconductor Manufacturing |
| Lipocine vs. Emergent Biosolutions | Lipocine vs. Bausch Health Companies | Lipocine vs. Neurocrine Biosciences | Lipocine vs. Teva Pharma Industries |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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