Correlation Between Lipella Pharmaceuticals and ImmuCell

Can any of the company-specific risk be diversified away by investing in both Lipella Pharmaceuticals and ImmuCell 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 ImmuCell 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 ImmuCell, you can compare the effects of market volatilities on Lipella Pharmaceuticals and ImmuCell 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 ImmuCell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipella Pharmaceuticals and ImmuCell.

Diversification Opportunities for Lipella Pharmaceuticals and ImmuCell

0.14

Correlation Coefficient

Lipella Pharmaceuticals  ImmuCell

Average diversification

The 3 months correlation between Lipella and ImmuCell is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Lipella Pharmaceuticals Common and ImmuCell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ImmuCell 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 ImmuCell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ImmuCell has no effect on the direction of Lipella Pharmaceuticals i.e., Lipella Pharmaceuticals and ImmuCell go up and down completely randomly.

Pair Corralation between Lipella Pharmaceuticals and ImmuCell

Given the investment horizon of 90 days Lipella Pharmaceuticals Common is expected to generate 3.51 times more return on investment than ImmuCell. However, Lipella Pharmaceuticals is 3.51 times more volatile than ImmuCell. It trades about 0.02 of its potential returns per unit of risk. ImmuCell is currently generating about 0.07 per unit of risk. If you would invest  332.00  in Lipella Pharmaceuticals Common on September 3, 2024 and sell it today you would lose (21.00) from holding Lipella Pharmaceuticals Common or give up 6.33% of portfolio value over 90 days.

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

Lipella Pharmaceuticals Common  vs.  ImmuCell

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.

ImmuCell

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ImmuCell are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, ImmuCell may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Lipella Pharmaceuticals and ImmuCell

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

The idea behind Lipella Pharmaceuticals Common and ImmuCell 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.