Correlation Between Lipocine and SNDL

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

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

Diversification Opportunities for Lipocine and SNDL

0.37

Correlation Coefficient

Lipocine  SNDL

Weak diversification

The 3 months correlation between Lipocine and SNDL is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL Inc 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 SNDL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNDL Inc has no effect on the direction of Lipocine i.e., Lipocine and SNDL go up and down completely randomly.

Pair Corralation between Lipocine and SNDL

Given the investment horizon of 90 days Lipocine is expected to generate 1.52 times more return on investment than SNDL. However, Lipocine is 1.52 times more volatile than SNDL Inc. It trades about 0.05 of its potential returns per unit of risk. SNDL Inc is currently generating about -0.09 per unit of risk. If you would invest  477.00  in Lipocine on September 19, 2024 and sell it today you would earn a total of  41.00  from holding Lipocine or generate 8.6% return on investment over 90 days.

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

Lipocine  vs.  SNDL Inc

Lipocine

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lipocine are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain fundamental indicators, Lipocine displayed solid returns over the last few months and may actually be approaching a breakup point.

SNDL Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SNDL Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Lipocine and SNDL

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

The idea behind Lipocine and SNDL Inc 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 Stocks Directory module to find actively traded stocks across global markets.