Correlation Between Saia and Lipocine

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

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

Diversification Opportunities for Saia and Lipocine

-0.04

Correlation Coefficient

Saia  Lipocine

Good diversification

The 3 months correlation between Saia and Lipocine is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Saia Inc and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and Saia 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 Saia Inc 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 Saia i.e., Saia and Lipocine go up and down completely randomly.

Pair Corralation between Saia and Lipocine

Given the investment horizon of 90 days Saia is expected to generate 2.92 times less return on investment than Lipocine. But when comparing it to its historical volatility, Saia Inc is 1.76 times less risky than Lipocine. It trades about 0.04 of its potential returns per unit of risk. Lipocine is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  260.00  in Lipocine on October 1, 2024 and sell it today you would earn a total of  216.00  from holding Lipocine or generate 83.08% return on investment over 90 days.

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

Saia Inc  vs.  Lipocine

Saia Inc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Saia Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating forward indicators, Saia may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 unsteady fundamental indicators, Lipocine displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Saia and Lipocine

The main advantage of trading using opposite Saia and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saia 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 Saia Inc 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.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.