Correlation Between Minsud Resources and Lipocine

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

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

Diversification Opportunities for Minsud Resources and Lipocine

-0.28

Correlation Coefficient

Minsud Resources  Lipocine

Very good diversification

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

Pair Corralation between Minsud Resources and Lipocine

Assuming the 90 days horizon Minsud Resources Corp is expected to generate 0.8 times more return on investment than Lipocine. However, Minsud Resources Corp is 1.25 times less risky than Lipocine. It trades about 0.04 of its potential returns per unit of risk. Lipocine is currently generating about -0.11 per unit of risk. If you would invest  62.00  in Minsud Resources Corp on December 29, 2024 and sell it today you would earn a total of  3.00  from holding Minsud Resources Corp or generate 4.84% return on investment over 90 days.

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

Minsud Resources Corp  vs.  Lipocine

Minsud Resources Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Minsud Resources Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Minsud Resources may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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.

Pair Trading with Minsud Resources and Lipocine

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

The idea behind Minsud Resources Corp and Lipocine 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.