Correlation Between Lipocine and Trump Media

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

By analyzing existing cross correlation between Lipocine and Trump Media Technology, you can compare the effects of market volatilities on Lipocine and Trump Media 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 Trump Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipocine and Trump Media.

Diversification Opportunities for Lipocine and Trump Media

0.5

Correlation Coefficient

Lipocine  Trump Media

Very weak diversification

The 3 months correlation between Lipocine and Trump is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and Trump Media Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trump Media Technology 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 Trump Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trump Media Technology has no effect on the direction of Lipocine i.e., Lipocine and Trump Media go up and down completely randomly.

Pair Corralation between Lipocine and Trump Media

Given the investment horizon of 90 days Lipocine is expected to generate 4.11 times less return on investment than Trump Media. But when comparing it to its historical volatility, Lipocine is 1.71 times less risky than Trump Media. It trades about 0.02 of its potential returns per unit of risk. Trump Media Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,315  in Trump Media Technology on December 2, 2024 and sell it today you would lose (254.00) from holding Trump Media Technology or give up 10.97% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.14%
Values	Daily Returns

Lipocine  vs.  Trump Media Technology

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.

Trump Media Technology

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Trump Media Technology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Trump Media is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Lipocine and Trump Media

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

The idea behind Lipocine and Trump Media Technology 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.