Correlation Between Vinci Partners and Lipocine

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

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

Diversification Opportunities for Vinci Partners and Lipocine

0.1

Correlation Coefficient

Vinci Partners  Lipocine

Average diversification

The 3 months correlation between Vinci and Lipocine is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Vinci Partners Investments and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and Vinci Partners 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 Vinci Partners Investments 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 Vinci Partners i.e., Vinci Partners and Lipocine go up and down completely randomly.

Pair Corralation between Vinci Partners and Lipocine

Given the investment horizon of 90 days Vinci Partners Investments is expected to generate 0.4 times more return on investment than Lipocine. However, Vinci Partners Investments is 2.51 times less risky than Lipocine. It trades about 0.06 of its potential returns per unit of risk. Lipocine is currently generating about -0.11 per unit of risk. If you would invest  986.00  in Vinci Partners Investments on December 21, 2024 and sell it today you would earn a total of  47.00  from holding Vinci Partners Investments or generate 4.77% return on investment over 90 days.

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

Vinci Partners Investments  vs.  Lipocine

Vinci Partners Inves

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vinci Partners Investments are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Vinci Partners is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail 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 Vinci Partners and Lipocine

The main advantage of trading using opposite Vinci Partners and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vinci Partners 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 Vinci Partners Investments 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.