Correlation Between Lipocine and Lionsgate Studios

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

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

Diversification Opportunities for Lipocine and Lionsgate Studios

-0.53

Correlation Coefficient

Lipocine  Lionsgate Studios

Excellent diversification

The 3 months correlation between Lipocine and Lionsgate is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and Lionsgate Studios Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lionsgate Studios Corp 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 Lionsgate Studios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lionsgate Studios Corp has no effect on the direction of Lipocine i.e., Lipocine and Lionsgate Studios go up and down completely randomly.

Pair Corralation between Lipocine and Lionsgate Studios

Given the investment horizon of 90 days Lipocine is expected to generate 2.39 times more return on investment than Lionsgate Studios. However, Lipocine is 2.39 times more volatile than Lionsgate Studios Corp. It trades about 0.04 of its potential returns per unit of risk. Lionsgate Studios Corp is currently generating about 0.03 per unit of risk. If you would invest  475.00  in Lipocine on September 15, 2024 and sell it today you would earn a total of  27.00  from holding Lipocine or generate 5.68% return on investment over 90 days.

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

Lipocine  vs.  Lionsgate Studios Corp

Lipocine

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lipocine are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain fundamental indicators, Lipocine may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Lionsgate Studios Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lionsgate Studios Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Lionsgate Studios is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Lipocine and Lionsgate Studios

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

The idea behind Lipocine and Lionsgate Studios 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.

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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.