Correlation Between Soleno Therapeutics and Lipocine
Can any of the company-specific risk be diversified away by investing in both Soleno 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 Soleno Therapeutics and Lipocine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Soleno Therapeutics and Lipocine, you can compare the effects of market volatilities on Soleno 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 Soleno Therapeutics with a short position of Lipocine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Soleno Therapeutics and Lipocine.
Diversification Opportunities for Soleno Therapeutics and Lipocine
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Soleno and Lipocine is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Soleno Therapeutics and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and Soleno 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 Soleno 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 Soleno Therapeutics i.e., Soleno Therapeutics and Lipocine go up and down completely randomly.
Pair Corralation between Soleno Therapeutics and Lipocine
Given the investment horizon of 90 days Soleno Therapeutics is expected to generate 0.41 times more return on investment than Lipocine. However, Soleno Therapeutics is 2.43 times less risky than Lipocine. It trades about 0.11 of its potential returns per unit of risk. Lipocine is currently generating about -0.13 per unit of risk. If you would invest 5,531 in Soleno Therapeutics on August 29, 2024 and sell it today you would earn a total of 303.00 from holding Soleno Therapeutics or generate 5.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Soleno Therapeutics vs. Lipocine
Performance |
| Timeline |
| Soleno Therapeutics |
| Lipocine |
Soleno Therapeutics and Lipocine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Soleno Therapeutics and Lipocine
The main advantage of trading using opposite Soleno Therapeutics and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Soleno 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.| Soleno Therapeutics vs. Eliem Therapeutics | Soleno Therapeutics vs. Scpharmaceuticals | Soleno Therapeutics vs. Milestone Pharmaceuticals | Soleno Therapeutics vs. Seres Therapeutics |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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