Correlation Between Akari Therapeutics and Lipocine

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

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

Diversification Opportunities for Akari Therapeutics and Lipocine

0.42

Correlation Coefficient

Akari Therapeutics  Lipocine

Very weak diversification

The 3 months correlation between Akari and Lipocine is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Akari Therapeutics PLC and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and Akari 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 Akari Therapeutics PLC 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 Akari Therapeutics i.e., Akari Therapeutics and Lipocine go up and down completely randomly.

Pair Corralation between Akari Therapeutics and Lipocine

Given the investment horizon of 90 days Akari Therapeutics PLC is expected to generate 1.79 times more return on investment than Lipocine. However, Akari Therapeutics is 1.79 times more volatile than Lipocine. It trades about 0.14 of its potential returns per unit of risk. Lipocine is currently generating about -0.11 per unit of risk. If you would invest  95.00  in Akari Therapeutics PLC on December 21, 2024 and sell it today you would earn a total of  55.00  from holding Akari Therapeutics PLC or generate 57.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Akari Therapeutics PLC  vs.  Lipocine

Akari Therapeutics PLC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Akari Therapeutics PLC are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Akari Therapeutics showed solid returns over the last few months and may actually be approaching a breakup point.

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 Akari Therapeutics and Lipocine

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

The idea behind Akari Therapeutics PLC 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.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..