Correlation Between Lipocine and Brickell Biotech
Can any of the company-specific risk be diversified away by investing in both Lipocine and Brickell Biotech 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 Lipocine and Brickell Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lipocine and Brickell Biotech, you can compare the effects of market volatilities on Lipocine and Brickell Biotech 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 Lipocine with a short position of Brickell Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipocine and Brickell Biotech.
Diversification Opportunities for Lipocine and Brickell Biotech
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lipocine and Brickell is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and Brickell Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brickell Biotech and Lipocine 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 Lipocine are associated (or correlated) with Brickell Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brickell Biotech has no effect on the direction of Lipocine i.e., Lipocine and Brickell Biotech go up and down completely randomly.
Pair Corralation between Lipocine and Brickell Biotech
Given the investment horizon of 90 days Lipocine is expected to generate 3.61 times more return on investment than Brickell Biotech. However, Lipocine is 3.61 times more volatile than Brickell Biotech. It trades about 0.19 of its potential returns per unit of risk. Brickell Biotech is currently generating about -0.04 per unit of risk. If you would invest 423.00 in Lipocine on January 20, 2024 and sell it today you would earn a total of 121.00 from holding Lipocine or generate 28.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Lipocine vs. Brickell Biotech
Performance |
Timeline |
Lipocine |
Brickell Biotech |
Lipocine and Brickell Biotech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lipocine and Brickell Biotech
The main advantage of trading using opposite Lipocine and Brickell Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lipocine position performs unexpectedly, Brickell Biotech 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 Brickell Biotech will offset losses from the drop in Brickell Biotech's long position.Lipocine vs. Reviva Pharmaceuticals Holdings | Lipocine vs. ZyVersa Therapeutics | Lipocine vs. Unicycive Therapeutics | Lipocine vs. Checkpoint Therapeutics |
Brickell Biotech vs. Japan Tobacco ADR | Brickell Biotech vs. Anheuser Busch Inbev | Brickell Biotech vs. Cardinal Health | Brickell Biotech vs. Scandinavian Tobacco Group |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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