Correlation Between Stepstone and Lipocine
Can any of the company-specific risk be diversified away by investing in both Stepstone 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 Stepstone and Lipocine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepstone Group and Lipocine, you can compare the effects of market volatilities on Stepstone 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 Stepstone with a short position of Lipocine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepstone and Lipocine.
Diversification Opportunities for Stepstone and Lipocine
Significant diversification
The 3 months correlation between Stepstone and Lipocine is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and Stepstone 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 Stepstone Group 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 Stepstone i.e., Stepstone and Lipocine go up and down completely randomly.
Pair Corralation between Stepstone and Lipocine
Given the investment horizon of 90 days Stepstone Group is expected to generate 0.49 times more return on investment than Lipocine. However, Stepstone Group is 2.03 times less risky than Lipocine. It trades about -0.16 of its potential returns per unit of risk. Lipocine is currently generating about -0.39 per unit of risk. If you would invest 6,242 in Stepstone Group on November 27, 2024 and sell it today you would lose (436.00) from holding Stepstone Group or give up 6.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stepstone Group vs. Lipocine
Performance |
| Timeline |
| Stepstone Group |
| Lipocine |
Stepstone and Lipocine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepstone and Lipocine
The main advantage of trading using opposite Stepstone and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepstone 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.| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
| 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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