Correlation Between T2 Biosystms and Lipocine
Can any of the company-specific risk be diversified away by investing in both T2 Biosystms 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 T2 Biosystms and Lipocine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between T2 Biosystms and Lipocine, you can compare the effects of market volatilities on T2 Biosystms 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 T2 Biosystms with a short position of Lipocine. Check out your portfolio center. Please also check ongoing floating volatility patterns of T2 Biosystms and Lipocine.
Diversification Opportunities for T2 Biosystms and Lipocine
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TTOO and Lipocine is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding T2 Biosystms and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and T2 Biosystms 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 T2 Biosystms 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 T2 Biosystms i.e., T2 Biosystms and Lipocine go up and down completely randomly.
Pair Corralation between T2 Biosystms and Lipocine
Given the investment horizon of 90 days T2 Biosystms is expected to under-perform the Lipocine. In addition to that, T2 Biosystms is 1.39 times more volatile than Lipocine. It trades about -0.35 of its total potential returns per unit of risk. Lipocine is currently generating about 0.04 per unit of volatility. If you would invest 511.00 in Lipocine on September 13, 2024 and sell it today you would earn a total of 15.00 from holding Lipocine or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
T2 Biosystms vs. Lipocine
Performance |
| Timeline |
| T2 Biosystms |
| Lipocine |
T2 Biosystms and Lipocine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with T2 Biosystms and Lipocine
The main advantage of trading using opposite T2 Biosystms and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T2 Biosystms 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.| T2 Biosystms vs. Puma Biotechnology | T2 Biosystms vs. Iovance Biotherapeutics | T2 Biosystms vs. Sarepta Therapeutics | T2 Biosystms vs. Day One Biopharmaceuticals |
| 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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