Correlation Between Corporacion America and Lipocine

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

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

Diversification Opportunities for Corporacion America and Lipocine

0.55

Correlation Coefficient

Corporacion America  Lipocine

Very weak diversification

The 3 months correlation between Corporacion and Lipocine is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Corporacion America Airports and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and Corporacion America 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 Corporacion America Airports 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 Corporacion America i.e., Corporacion America and Lipocine go up and down completely randomly.

Pair Corralation between Corporacion America and Lipocine

Given the investment horizon of 90 days Corporacion America Airports is expected to generate 0.61 times more return on investment than Lipocine. However, Corporacion America Airports is 1.64 times less risky than Lipocine. It trades about -0.01 of its potential returns per unit of risk. Lipocine is currently generating about -0.11 per unit of risk. If you would invest  1,878  in Corporacion America Airports on December 30, 2024 and sell it today you would lose (56.00) from holding Corporacion America Airports or give up 2.98% of portfolio value over 90 days.

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

Corporacion America Airports  vs.  Lipocine

Corporacion America

Risk-Adjusted Performance

Very Weak

Over the last 90 days Corporacion America Airports has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Corporacion America 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

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 Corporacion America and Lipocine

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