Correlation Between Lipocine and Venu Holding

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

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

Diversification Opportunities for Lipocine and Venu Holding

0.12

Correlation Coefficient

Lipocine  Venu Holding

Average diversification

The 3 months correlation between Lipocine and Venu is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and Venu Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Venu Holding 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 Venu Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Venu Holding has no effect on the direction of Lipocine i.e., Lipocine and Venu Holding go up and down completely randomly.

Pair Corralation between Lipocine and Venu Holding

Given the investment horizon of 90 days Lipocine is expected to generate 306.35 times less return on investment than Venu Holding. But when comparing it to its historical volatility, Lipocine is 61.67 times less risky than Venu Holding. It trades about 0.06 of its potential returns per unit of risk. Venu Holding is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Venu Holding on September 14, 2024 and sell it today you would earn a total of  980.00  from holding Venu Holding or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	19.05%
Values	Daily Returns

Lipocine  vs.  Venu Holding

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.

Venu Holding

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Venu Holding are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Venu Holding unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lipocine and Venu Holding

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

The idea behind Lipocine and Venu Holding 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..