Correlation Between United Parks and Lipocine
Can any of the company-specific risk be diversified away by investing in both United Parks 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 United Parks and Lipocine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Parks Resorts and Lipocine, you can compare the effects of market volatilities on United Parks 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 United Parks with a short position of Lipocine. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Parks and Lipocine.
Diversification Opportunities for United Parks and Lipocine
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between United and Lipocine is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding United Parks Resorts and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and United Parks 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 United Parks Resorts 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 United Parks i.e., United Parks and Lipocine go up and down completely randomly.
Pair Corralation between United Parks and Lipocine
Given the investment horizon of 90 days United Parks Resorts is expected to generate 0.35 times more return on investment than Lipocine. However, United Parks Resorts is 2.89 times less risky than Lipocine. It trades about 0.24 of its potential returns per unit of risk. Lipocine is currently generating about -0.12 per unit of risk. If you would invest 5,263 in United Parks Resorts on September 1, 2024 and sell it today you would earn a total of 601.00 from holding United Parks Resorts or generate 11.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Parks Resorts vs. Lipocine
Performance |
| Timeline |
| United Parks Resorts |
| Lipocine |
United Parks and Lipocine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Parks and Lipocine
The main advantage of trading using opposite United Parks and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Parks 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.| United Parks vs. Cracker Barrel Old | United Parks vs. Cementos Pacasmayo SAA | United Parks vs. BJs Restaurants | United Parks vs. Flexible Solutions International |
| 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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