Correlation Between Lipella Pharmaceuticals and Transgene

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

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

Diversification Opportunities for Lipella Pharmaceuticals and Transgene

0.0

Correlation Coefficient

Lipella Pharmaceuticals  Transgene

Pay attention - limited upside

The 3 months correlation between Lipella and Transgene is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lipella Pharmaceuticals Common and Transgene SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transgene SA and Lipella Pharmaceuticals 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 Lipella Pharmaceuticals Common are associated (or correlated) with Transgene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transgene SA has no effect on the direction of Lipella Pharmaceuticals i.e., Lipella Pharmaceuticals and Transgene go up and down completely randomly.

Pair Corralation between Lipella Pharmaceuticals and Transgene

Given the investment horizon of 90 days Lipella Pharmaceuticals is expected to generate 2.13 times less return on investment than Transgene. But when comparing it to its historical volatility, Lipella Pharmaceuticals Common is 1.7 times less risky than Transgene. It trades about 0.04 of its potential returns per unit of risk. Transgene SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1.00  in Transgene SA on September 3, 2024 and sell it today you would earn a total of  158.00  from holding Transgene SA or generate 15800.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.19%
Values	Daily Returns

Lipella Pharmaceuticals Common  vs.  Transgene SA

Lipella Pharmaceuticals

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lipella Pharmaceuticals Common are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Lipella Pharmaceuticals may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Transgene SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Transgene SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Transgene is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Lipella Pharmaceuticals and Transgene

The main advantage of trading using opposite Lipella Pharmaceuticals and Transgene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lipella Pharmaceuticals position performs unexpectedly, Transgene 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 Transgene will offset losses from the drop in Transgene's long position.

The idea behind Lipella Pharmaceuticals Common and Transgene SA 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.