Correlation Between Ivanhoe Electric and Lipocine

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

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

Diversification Opportunities for Ivanhoe Electric and Lipocine

0.59

Correlation Coefficient

Ivanhoe Electric  Lipocine

Very weak diversification

The 3 months correlation between Ivanhoe and Lipocine is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Electric and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and Ivanhoe Electric 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 Ivanhoe Electric 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 Ivanhoe Electric i.e., Ivanhoe Electric and Lipocine go up and down completely randomly.

Pair Corralation between Ivanhoe Electric and Lipocine

Allowing for the 90-day total investment horizon Ivanhoe Electric is expected to generate 0.93 times more return on investment than Lipocine. However, Ivanhoe Electric is 1.08 times less risky than Lipocine. It trades about -0.03 of its potential returns per unit of risk. Lipocine is currently generating about -0.11 per unit of risk. If you would invest  763.00  in Ivanhoe Electric on December 29, 2024 and sell it today you would lose (82.00) from holding Ivanhoe Electric or give up 10.75% of portfolio value over 90 days.

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

Ivanhoe Electric  vs.  Lipocine

Ivanhoe Electric

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ivanhoe Electric has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

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 Ivanhoe Electric and Lipocine

The main advantage of trading using opposite Ivanhoe Electric and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Electric 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 Ivanhoe Electric 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.