Correlation Between Lipocine and CONOCOPHILLIPS

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

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

Diversification Opportunities for Lipocine and CONOCOPHILLIPS

0.5

Correlation Coefficient

Lipocine  CONOCOPHILLIPS

Very weak diversification

The 3 months correlation between Lipocine and CONOCOPHILLIPS is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and CONOCOPHILLIPS CDA FDG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONOCOPHILLIPS CDA FDG 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 CONOCOPHILLIPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONOCOPHILLIPS CDA FDG has no effect on the direction of Lipocine i.e., Lipocine and CONOCOPHILLIPS go up and down completely randomly.

Pair Corralation between Lipocine and CONOCOPHILLIPS

Given the investment horizon of 90 days Lipocine is expected to generate 4.9 times more return on investment than CONOCOPHILLIPS. However, Lipocine is 4.9 times more volatile than CONOCOPHILLIPS CDA FDG. It trades about 0.06 of its potential returns per unit of risk. CONOCOPHILLIPS CDA FDG is currently generating about -0.13 per unit of risk. If you would invest  475.00  in Lipocine on September 14, 2024 and sell it today you would earn a total of  51.00  from holding Lipocine or generate 10.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	50.79%
Values	Daily Returns

Lipocine  vs.  CONOCOPHILLIPS CDA FDG

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 weak fundamental indicators, Lipocine displayed solid returns over the last few months and may actually be approaching a breakup point.

CONOCOPHILLIPS CDA FDG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CONOCOPHILLIPS CDA FDG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for CONOCOPHILLIPS CDA FDG investors.

Pair Trading with Lipocine and CONOCOPHILLIPS

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

The idea behind Lipocine and CONOCOPHILLIPS CDA FDG 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.