Correlation Between Lipocine and One Gas

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

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

Diversification Opportunities for Lipocine and One Gas

-0.28

Correlation Coefficient

Lipocine  One Gas

Very good diversification

The 3 months correlation between Lipocine and One is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and One Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Gas 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 One Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Gas has no effect on the direction of Lipocine i.e., Lipocine and One Gas go up and down completely randomly.

Pair Corralation between Lipocine and One Gas

Given the investment horizon of 90 days Lipocine is expected to generate 4.45 times more return on investment than One Gas. However, Lipocine is 4.45 times more volatile than One Gas. It trades about 0.02 of its potential returns per unit of risk. One Gas is currently generating about 0.08 per unit of risk. If you would invest  363.00  in Lipocine on December 2, 2024 and sell it today you would lose (56.00) from holding Lipocine or give up 15.43% of portfolio value over 90 days.

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

Lipocine  vs.  One Gas

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.

One Gas

Risk-Adjusted Performance

Very Weak

Over the last 90 days One Gas has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, One Gas is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Lipocine and One Gas

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

The idea behind Lipocine and One Gas 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.