Correlation Between Lipocine and Serina Therapeutics

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

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

Diversification Opportunities for Lipocine and Serina Therapeutics

0.1

Correlation Coefficient

Lipocine  Serina Therapeutics

Average diversification

The 3 months correlation between Lipocine and Serina is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and Serina Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Serina Therapeutics 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 Serina Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Serina Therapeutics has no effect on the direction of Lipocine i.e., Lipocine and Serina Therapeutics go up and down completely randomly.

Pair Corralation between Lipocine and Serina Therapeutics

Given the investment horizon of 90 days Lipocine is expected to generate 0.78 times more return on investment than Serina Therapeutics. However, Lipocine is 1.28 times less risky than Serina Therapeutics. It trades about 0.01 of its potential returns per unit of risk. Serina Therapeutics is currently generating about 0.0 per unit of risk. If you would invest  682.00  in Lipocine on September 19, 2024 and sell it today you would lose (208.00) from holding Lipocine or give up 30.5% of portfolio value over 90 days.

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

Lipocine  vs.  Serina Therapeutics

Lipocine

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lipocine are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain fundamental indicators, Lipocine displayed solid returns over the last few months and may actually be approaching a breakup point.

Serina Therapeutics

Risk-Adjusted Performance

3 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Serina Therapeutics are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating technical and fundamental indicators, Serina Therapeutics reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lipocine and Serina Therapeutics

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

The idea behind Lipocine and Serina Therapeutics 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..