Correlation Between 694308KB2 and Lipocine

Can any of the company-specific risk be diversified away by investing in both 694308KB2 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 694308KB2 and Lipocine into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PCG 42 01 MAR 29 and Lipocine, you can compare the effects of market volatilities on 694308KB2 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 694308KB2 with a short position of Lipocine. Check out your portfolio center. Please also check ongoing floating volatility patterns of 694308KB2 and Lipocine.

Diversification Opportunities for 694308KB2 and Lipocine

-0.45

Correlation Coefficient

694308KB2  Lipocine

Very good diversification

The 3 months correlation between 694308KB2 and Lipocine is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding PCG 42 01 MAR 29 and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and 694308KB2 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 PCG 42 01 MAR 29 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 694308KB2 i.e., 694308KB2 and Lipocine go up and down completely randomly.

Pair Corralation between 694308KB2 and Lipocine

Assuming the 90 days trading horizon PCG 42 01 MAR 29 is expected to generate 0.32 times more return on investment than Lipocine. However, PCG 42 01 MAR 29 is 3.15 times less risky than Lipocine. It trades about -0.13 of its potential returns per unit of risk. Lipocine is currently generating about -0.1 per unit of risk. If you would invest  9,665  in PCG 42 01 MAR 29 on December 27, 2024 and sell it today you would lose (934.00) from holding PCG 42 01 MAR 29 or give up 9.66% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.33%
Values	Daily Returns

PCG 42 01 MAR 29  vs.  Lipocine

PCG 42 01

Risk-Adjusted Performance

Very Weak

Over the last 90 days PCG 42 01 MAR 29 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain 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 PCG 42 01 MAR 29 investors.

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 694308KB2 and Lipocine

The main advantage of trading using opposite 694308KB2 and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 694308KB2 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 PCG 42 01 MAR 29 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.