Correlation Between Lipella Pharmaceuticals and Ascletis Pharma

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

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

Diversification Opportunities for Lipella Pharmaceuticals and Ascletis Pharma

-0.49

Correlation Coefficient

Lipella Pharmaceuticals  Ascletis Pharma

Very good diversification

The 3 months correlation between Lipella and Ascletis is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Lipella Pharmaceuticals Common and Ascletis Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascletis Pharma and Lipella Pharmaceuticals 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 Lipella Pharmaceuticals Common are associated (or correlated) with Ascletis Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascletis Pharma has no effect on the direction of Lipella Pharmaceuticals i.e., Lipella Pharmaceuticals and Ascletis Pharma go up and down completely randomly.

Pair Corralation between Lipella Pharmaceuticals and Ascletis Pharma

Given the investment horizon of 90 days Lipella Pharmaceuticals Common is expected to under-perform the Ascletis Pharma. In addition to that, Lipella Pharmaceuticals is 2.54 times more volatile than Ascletis Pharma. It trades about -0.01 of its total potential returns per unit of risk. Ascletis Pharma is currently generating about 0.01 per unit of volatility. If you would invest  20.00  in Ascletis Pharma on September 4, 2024 and sell it today you would lose (2.00) from holding Ascletis Pharma or give up 10.0% of portfolio value over 90 days.

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

Lipella Pharmaceuticals Common  vs.  Ascletis Pharma

Lipella Pharmaceuticals

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lipella Pharmaceuticals Common are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Lipella Pharmaceuticals may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Ascletis Pharma

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ascletis Pharma are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent essential indicators, Ascletis Pharma reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lipella Pharmaceuticals and Ascletis Pharma

The main advantage of trading using opposite Lipella Pharmaceuticals and Ascletis Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lipella Pharmaceuticals position performs unexpectedly, Ascletis Pharma 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 Ascletis Pharma will offset losses from the drop in Ascletis Pharma's long position.

The idea behind Lipella Pharmaceuticals Common and Ascletis Pharma 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.