Correlation Between Comstock Holding and Lipocine

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

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

Diversification Opportunities for Comstock Holding and Lipocine

0.49

Correlation Coefficient

Comstock Holding  Lipocine

Very weak diversification

The 3 months correlation between Comstock and Lipocine is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Comstock Holding Companies and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and Comstock Holding 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 Comstock Holding Companies 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 Comstock Holding i.e., Comstock Holding and Lipocine go up and down completely randomly.

Pair Corralation between Comstock Holding and Lipocine

Given the investment horizon of 90 days Comstock Holding is expected to generate 2.43 times less return on investment than Lipocine. In addition to that, Comstock Holding is 1.04 times more volatile than Lipocine. It trades about 0.02 of its total potential returns per unit of risk. Lipocine is currently generating about 0.04 per unit of volatility. If you would invest  475.00  in Lipocine on September 14, 2024 and sell it today you would earn a total of  26.00  from holding Lipocine or generate 5.47% return on investment over 90 days.

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

Comstock Holding Companies  vs.  Lipocine

Comstock Holding Com

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Comstock Holding Companies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, Comstock Holding is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

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 weak fundamental indicators, Lipocine may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Comstock Holding and Lipocine

The main advantage of trading using opposite Comstock Holding and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comstock Holding 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 Comstock Holding Companies 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.