Correlation Between Lipocine and 126408HH9

Can any of the company-specific risk be diversified away by investing in both Lipocine and 126408HH9 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 126408HH9 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lipocine and CSX P 325, you can compare the effects of market volatilities on Lipocine and 126408HH9 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 126408HH9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipocine and 126408HH9.

Diversification Opportunities for Lipocine and 126408HH9

0.37

Correlation Coefficient

Lipocine  126408HH9

Weak diversification

The 3 months correlation between Lipocine and 126408HH9 is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and CSX P 325 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSX P 325 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 126408HH9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSX P 325 has no effect on the direction of Lipocine i.e., Lipocine and 126408HH9 go up and down completely randomly.

Pair Corralation between Lipocine and 126408HH9

Given the investment horizon of 90 days Lipocine is expected to generate 10.32 times more return on investment than 126408HH9. However, Lipocine is 10.32 times more volatile than CSX P 325. It trades about 0.04 of its potential returns per unit of risk. CSX P 325 is currently generating about -0.25 per unit of risk. If you would invest  499.00  in Lipocine on October 6, 2024 and sell it today you would earn a total of  7.00  from holding Lipocine or generate 1.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Lipocine  vs.  CSX P 325

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 weak fundamental indicators, Lipocine may actually be approaching a critical reversion point that can send shares even higher in February 2025.

CSX P 325

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CSX P 325 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 126408HH9 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lipocine and 126408HH9

The main advantage of trading using opposite Lipocine and 126408HH9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lipocine position performs unexpectedly, 126408HH9 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 126408HH9 will offset losses from the drop in 126408HH9's long position.

The idea behind Lipocine and CSX P 325 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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.