Correlation Between Lipocine and ANZ Group

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

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

Diversification Opportunities for Lipocine and ANZ Group

0.15

Correlation Coefficient

Lipocine  ANZ Group

Average diversification

The 3 months correlation between Lipocine and ANZ is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and ANZ Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANZ Group Holdings and Lipocine 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 Lipocine are associated (or correlated) with ANZ Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANZ Group Holdings has no effect on the direction of Lipocine i.e., Lipocine and ANZ Group go up and down completely randomly.

Pair Corralation between Lipocine and ANZ Group

Given the investment horizon of 90 days Lipocine is expected to generate 2.63 times more return on investment than ANZ Group. However, Lipocine is 2.63 times more volatile than ANZ Group Holdings. It trades about -0.02 of its potential returns per unit of risk. ANZ Group Holdings is currently generating about -0.29 per unit of risk. If you would invest  515.00  in Lipocine on October 9, 2024 and sell it today you would lose (15.00) from holding Lipocine or give up 2.91% of portfolio value over 90 days.

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

Lipocine  vs.  ANZ Group Holdings

Lipocine

Risk-Adjusted Performance

0 of 100

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 very healthy fundamental indicators, Lipocine is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

ANZ Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANZ Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Lipocine and ANZ Group

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

The idea behind Lipocine and ANZ Group Holdings 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.