Correlation Between Lipella Pharmaceuticals and Premier Financial

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

Diversification Opportunities for Lipella Pharmaceuticals and Premier Financial

-0.63

Correlation Coefficient

Lipella Pharmaceuticals  Premier Financial

Excellent diversification

The 3 months correlation between Lipella and Premier is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Lipella Pharmaceuticals Common and Premier Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Financial Corp 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 Premier Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Financial Corp has no effect on the direction of Lipella Pharmaceuticals i.e., Lipella Pharmaceuticals and Premier Financial go up and down completely randomly.

Pair Corralation between Lipella Pharmaceuticals and Premier Financial

Given the investment horizon of 90 days Lipella Pharmaceuticals Common is expected to generate 4.62 times more return on investment than Premier Financial. However, Lipella Pharmaceuticals is 4.62 times more volatile than Premier Financial Corp. It trades about 0.15 of its potential returns per unit of risk. Premier Financial Corp is currently generating about -0.36 per unit of risk. If you would invest  303.00  in Lipella Pharmaceuticals Common on October 9, 2024 and sell it today you would earn a total of  54.00  from holding Lipella Pharmaceuticals Common or generate 17.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

Lipella Pharmaceuticals Common  vs.  Premier Financial Corp

Lipella Pharmaceuticals

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lipella Pharmaceuticals Common are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Lipella Pharmaceuticals displayed solid returns over the last few months and may actually be approaching a breakup point.

Premier Financial Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Premier Financial Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, Premier Financial exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lipella Pharmaceuticals and Premier Financial

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

The idea behind Lipella Pharmaceuticals Common and Premier Financial Corp 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.