Correlation Between Lipocine and TMT Acquisition

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

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

Diversification Opportunities for Lipocine and TMT Acquisition

0.14

Correlation Coefficient

Lipocine  TMT Acquisition

Average diversification

The 3 months correlation between Lipocine and TMT is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and TMT Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TMT Acquisition 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 TMT Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TMT Acquisition Corp has no effect on the direction of Lipocine i.e., Lipocine and TMT Acquisition go up and down completely randomly.

Pair Corralation between Lipocine and TMT Acquisition

Given the investment horizon of 90 days Lipocine is expected to generate 0.34 times more return on investment than TMT Acquisition. However, Lipocine is 2.97 times less risky than TMT Acquisition. It trades about 0.03 of its potential returns per unit of risk. TMT Acquisition Corp is currently generating about -0.21 per unit of risk. If you would invest  514.00  in Lipocine on October 11, 2024 and sell it today you would earn a total of  9.00  from holding Lipocine or generate 1.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	53.23%
Values	Daily Returns

Lipocine  vs.  TMT Acquisition Corp

Lipocine

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lipocine are ranked lower than 2 (%) 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 February 2025.

TMT Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TMT Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Lipocine and TMT Acquisition

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

The idea behind Lipocine and TMT Acquisition 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.