Correlation Between GOLDMAN and Lipocine
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By analyzing existing cross correlation between GOLDMAN SACHS GROUP and Lipocine, you can compare the effects of market volatilities on GOLDMAN 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 GOLDMAN with a short position of Lipocine. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLDMAN and Lipocine.
Diversification Opportunities for GOLDMAN and Lipocine
Poor diversification
The 3 months correlation between GOLDMAN and Lipocine is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding GOLDMAN SACHS GROUP and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and GOLDMAN 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 GOLDMAN SACHS 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 GOLDMAN i.e., GOLDMAN and Lipocine go up and down completely randomly.
Pair Corralation between GOLDMAN and Lipocine
Assuming the 90 days trading horizon GOLDMAN SACHS GROUP is expected to generate 0.32 times more return on investment than Lipocine. However, GOLDMAN SACHS GROUP is 3.16 times less risky than Lipocine. It trades about -0.34 of its potential returns per unit of risk. Lipocine is currently generating about -0.21 per unit of risk. If you would invest 9,893 in GOLDMAN SACHS GROUP on September 3, 2024 and sell it today you would lose (323.00) from holding GOLDMAN SACHS GROUP or give up 3.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 25.0% |
| Values | Daily Returns |
GOLDMAN SACHS GROUP vs. Lipocine
Performance |
| Timeline |
| GOLDMAN SACHS GROUP |
| Lipocine |
GOLDMAN and Lipocine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GOLDMAN and Lipocine
The main advantage of trading using opposite GOLDMAN and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOLDMAN 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.The idea behind GOLDMAN SACHS GROUP and Lipocine pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Lipocine vs. DiaMedica Therapeutics | Lipocine vs. Lyra Therapeutics | Lipocine vs. Centessa Pharmaceuticals PLC |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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