Correlation Between Frontier and Lipocine

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

By analyzing existing cross correlation between Frontier Florida 686 and Lipocine, you can compare the effects of market volatilities on Frontier 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 Frontier with a short position of Lipocine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frontier and Lipocine.

Diversification Opportunities for Frontier and Lipocine

0.07

Correlation Coefficient

Frontier  Lipocine

Significant diversification

The 3 months correlation between Frontier and Lipocine is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Frontier Florida 686 and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and Frontier 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 Frontier Florida 686 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 Frontier i.e., Frontier and Lipocine go up and down completely randomly.

Pair Corralation between Frontier and Lipocine

Assuming the 90 days trading horizon Frontier Florida 686 is expected to generate 9.23 times more return on investment than Lipocine. However, Frontier is 9.23 times more volatile than Lipocine. It trades about 0.04 of its potential returns per unit of risk. Lipocine is currently generating about 0.02 per unit of risk. If you would invest  9,146  in Frontier Florida 686 on September 14, 2024 and sell it today you would lose (246.00) from holding Frontier Florida 686 or give up 2.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	80.2%
Values	Daily Returns

Frontier Florida 686  vs.  Lipocine

Frontier Florida 686

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Frontier Florida 686 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for Frontier Florida 686 investors.

Lipocine

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lipocine are ranked lower than 3 (%) 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 January 2025.

Pair Trading with Frontier and Lipocine

The main advantage of trading using opposite Frontier and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frontier 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 Frontier Florida 686 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.