Correlation Between AGL Energy and Lipocine

Can any of the company-specific risk be diversified away by investing in both AGL Energy 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 AGL Energy and Lipocine into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AGL Energy Limited and Lipocine, you can compare the effects of market volatilities on AGL Energy 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 AGL Energy with a short position of Lipocine. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGL Energy and Lipocine.

Diversification Opportunities for AGL Energy and Lipocine

0.0

Correlation Coefficient

AGL Energy  Lipocine

Pay attention - limited upside

The 3 months correlation between AGL and Lipocine is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AGL Energy Limited and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and AGL Energy 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 AGL Energy Limited 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 AGL Energy i.e., AGL Energy and Lipocine go up and down completely randomly.

Pair Corralation between AGL Energy and Lipocine

If you would invest (100.00) in AGL Energy Limited on December 20, 2024 and sell it today you would earn a total of  100.00  from holding AGL Energy Limited or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

AGL Energy Limited  vs.  Lipocine

AGL Energy Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days AGL Energy Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, AGL Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Lipocine

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lipocine has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with AGL Energy and Lipocine

The main advantage of trading using opposite AGL Energy and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGL Energy 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 AGL Energy Limited 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.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.