Correlation Between Asure Software and Lipocine

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

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

Diversification Opportunities for Asure Software and Lipocine

0.05

Correlation Coefficient

Asure Software  Lipocine

Significant diversification

The 3 months correlation between Asure and Lipocine is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Asure Software and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and Asure Software 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 Asure Software 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 Asure Software i.e., Asure Software and Lipocine go up and down completely randomly.

Pair Corralation between Asure Software and Lipocine

Given the investment horizon of 90 days Asure Software is expected to under-perform the Lipocine. But the stock apears to be less risky and, when comparing its historical volatility, Asure Software is 2.58 times less risky than Lipocine. The stock trades about -0.1 of its potential returns per unit of risk. The Lipocine is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  500.00  in Lipocine on September 22, 2024 and sell it today you would lose (13.00) from holding Lipocine or give up 2.6% of portfolio value over 90 days.

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

Asure Software  vs.  Lipocine

Asure Software

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asure Software has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Asure Software is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Lipocine

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lipocine are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain fundamental indicators, Lipocine displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Asure Software and Lipocine

The main advantage of trading using opposite Asure Software and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asure Software 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 Asure Software 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.