Correlation Between ATRenew and Lipocine

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

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

Diversification Opportunities for ATRenew and Lipocine

-0.44

Correlation Coefficient

ATRenew  Lipocine

Very good diversification

The 3 months correlation between ATRenew and Lipocine is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding ATRenew Inc DRC and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and ATRenew 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 ATRenew Inc DRC are associated (or correlated) with Lipocine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lipocine has no effect on the direction of ATRenew i.e., ATRenew and Lipocine go up and down completely randomly.

Pair Corralation between ATRenew and Lipocine

Given the investment horizon of 90 days ATRenew Inc DRC is expected to under-perform the Lipocine. In addition to that, ATRenew is 1.07 times more volatile than Lipocine. It trades about -0.07 of its total potential returns per unit of risk. Lipocine is currently generating about 0.08 per unit of volatility. If you would invest  454.00  in Lipocine on September 30, 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 Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

ATRenew Inc DRC  vs.  Lipocine

ATRenew Inc DRC

Risk-Adjusted Performance

4 of 100

Insignificant

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

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.

Pair Trading with ATRenew and Lipocine

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

The idea behind ATRenew Inc DRC and Lipocine 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 Transaction History module to view history of all your transactions and understand their impact on performance.