Correlation Between Lipocine and Nabriva Therapeutics

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

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

Diversification Opportunities for Lipocine and Nabriva Therapeutics

-0.52

Correlation Coefficient

Lipocine  Nabriva Therapeutics

Excellent diversification

The 3 months correlation between Lipocine and Nabriva is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and Nabriva Therapeutics AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nabriva Therapeutics 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 Nabriva Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nabriva Therapeutics has no effect on the direction of Lipocine i.e., Lipocine and Nabriva Therapeutics go up and down completely randomly.

Pair Corralation between Lipocine and Nabriva Therapeutics

If you would invest  365.00  in Lipocine on September 3, 2024 and sell it today you would earn a total of  89.00  from holding Lipocine or generate 24.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Lipocine  vs.  Nabriva Therapeutics AG

Lipocine

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lipocine are ranked lower than 7 (%) 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.

Nabriva Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nabriva Therapeutics AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Nabriva Therapeutics is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Lipocine and Nabriva Therapeutics

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

The idea behind Lipocine and Nabriva Therapeutics AG 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.