Correlation Between Univest Pennsylvania and Lipocine

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

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

Diversification Opportunities for Univest Pennsylvania and Lipocine

-0.4

Correlation Coefficient

Univest Pennsylvania  Lipocine

Very good diversification

The 3 months correlation between Univest and Lipocine is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Univest Pennsylvania and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and Univest Pennsylvania 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 Univest Pennsylvania 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 Univest Pennsylvania i.e., Univest Pennsylvania and Lipocine go up and down completely randomly.

Pair Corralation between Univest Pennsylvania and Lipocine

Given the investment horizon of 90 days Univest Pennsylvania is expected to generate 1.74 times less return on investment than Lipocine. But when comparing it to its historical volatility, Univest Pennsylvania is 2.0 times less risky than Lipocine. It trades about 0.01 of its potential returns per unit of risk. Lipocine is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  511.00  in Lipocine on October 12, 2024 and sell it today you would lose (22.00) from holding Lipocine or give up 4.31% of portfolio value over 90 days.

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

Univest Pennsylvania  vs.  Lipocine

Univest Pennsylvania

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Univest Pennsylvania has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Univest Pennsylvania is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Lipocine

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Lipocine has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Lipocine is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Univest Pennsylvania and Lipocine

The main advantage of trading using opposite Univest Pennsylvania and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Univest Pennsylvania 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 Univest Pennsylvania 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..