Correlation Between Lipocine and INGEVITY

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

By analyzing existing cross correlation between Lipocine and INGEVITY P 3875, you can compare the effects of market volatilities on Lipocine and INGEVITY 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 INGEVITY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipocine and INGEVITY.

Diversification Opportunities for Lipocine and INGEVITY

0.0

Correlation Coefficient

Lipocine  INGEVITY

Pay attention - limited upside

The 3 months correlation between Lipocine and INGEVITY is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and INGEVITY P 3875 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INGEVITY P 3875 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 INGEVITY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INGEVITY P 3875 has no effect on the direction of Lipocine i.e., Lipocine and INGEVITY go up and down completely randomly.

Pair Corralation between Lipocine and INGEVITY

Given the investment horizon of 90 days Lipocine is expected to generate 303.38 times less return on investment than INGEVITY. But when comparing it to its historical volatility, Lipocine is 12.44 times less risky than INGEVITY. It trades about 0.0 of its potential returns per unit of risk. INGEVITY P 3875 is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  8,854  in INGEVITY P 3875 on October 23, 2024 and sell it today you would lose (323.00) from holding INGEVITY P 3875 or give up 3.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	88.08%
Values	Daily Returns

Lipocine  vs.  INGEVITY P 3875

Lipocine

Risk-Adjusted Performance

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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.

INGEVITY P 3875

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INGEVITY P 3875 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for INGEVITY P 3875 investors.

Pair Trading with Lipocine and INGEVITY

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

The idea behind Lipocine and INGEVITY P 3875 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.