Correlation Between Lipocine and Kulicke

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

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

Diversification Opportunities for Lipocine and Kulicke

-0.32

Correlation Coefficient

Lipocine  Kulicke

Very good diversification

The 3 months correlation between Lipocine and Kulicke is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and Kulicke and Soffa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kulicke and Soffa 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 Kulicke. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kulicke and Soffa has no effect on the direction of Lipocine i.e., Lipocine and Kulicke go up and down completely randomly.

Pair Corralation between Lipocine and Kulicke

Given the investment horizon of 90 days Lipocine is expected to generate 2.84 times more return on investment than Kulicke. However, Lipocine is 2.84 times more volatile than Kulicke and Soffa. It trades about -0.07 of its potential returns per unit of risk. Kulicke and Soffa is currently generating about -0.23 per unit of risk. If you would invest  526.00  in Lipocine on October 13, 2024 and sell it today you would lose (37.00) from holding Lipocine or give up 7.03% of portfolio value over 90 days.

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

Lipocine  vs.  Kulicke and Soffa

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.

Kulicke and Soffa

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Kulicke and Soffa has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, Kulicke is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Lipocine and Kulicke

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

The idea behind Lipocine and Kulicke and Soffa 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.