Correlation Between Lipocine and EnVVeno Medical

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

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

Diversification Opportunities for Lipocine and EnVVeno Medical

0.38

Correlation Coefficient

Lipocine  EnVVeno Medical

Weak diversification

The 3 months correlation between Lipocine and EnVVeno is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and enVVeno Medical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on enVVeno Medical 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 EnVVeno Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of enVVeno Medical Corp has no effect on the direction of Lipocine i.e., Lipocine and EnVVeno Medical go up and down completely randomly.

Pair Corralation between Lipocine and EnVVeno Medical

Given the investment horizon of 90 days Lipocine is expected to generate 1.17 times more return on investment than EnVVeno Medical. However, Lipocine is 1.17 times more volatile than enVVeno Medical Corp. It trades about 0.0 of its potential returns per unit of risk. enVVeno Medical Corp is currently generating about 0.0 per unit of risk. If you would invest  885.00  in Lipocine on October 23, 2024 and sell it today you would lose (435.00) from holding Lipocine or give up 49.15% of portfolio value over 90 days.

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

Lipocine  vs.  enVVeno Medical Corp

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 weak performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

enVVeno Medical Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in enVVeno Medical Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, EnVVeno Medical is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Lipocine and EnVVeno Medical

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

The idea behind Lipocine and enVVeno Medical 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.