Correlation Between Lipocine and Brunswick

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

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

Diversification Opportunities for Lipocine and Brunswick

0.17

Correlation Coefficient

Lipocine  Brunswick

Average diversification

The 3 months correlation between Lipocine and Brunswick is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and Brunswick in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunswick 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 Brunswick. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brunswick has no effect on the direction of Lipocine i.e., Lipocine and Brunswick go up and down completely randomly.

Pair Corralation between Lipocine and Brunswick

Given the investment horizon of 90 days Lipocine is expected to generate 3.46 times more return on investment than Brunswick. However, Lipocine is 3.46 times more volatile than Brunswick. It trades about 0.08 of its potential returns per unit of risk. Brunswick is currently generating about -0.92 per unit of risk. If you would invest  454.00  in Lipocine on September 29, 2024 and sell it today you would earn a total of  22.00  from holding Lipocine or generate 4.85% return on investment over 90 days.

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

Lipocine  vs.  Brunswick

Lipocine

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lipocine are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady fundamental indicators, Lipocine displayed solid returns over the last few months and may actually be approaching a breakup point.

Brunswick

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brunswick has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Lipocine and Brunswick

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

The idea behind Lipocine and Brunswick 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.