Correlation Between Serina Therapeutics and Lipocine

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

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

Diversification Opportunities for Serina Therapeutics and Lipocine

0.1

Correlation Coefficient

Serina Therapeutics  Lipocine

Average diversification

The 3 months correlation between Serina and Lipocine is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Serina Therapeutics and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and Serina Therapeutics 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 Serina Therapeutics 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 Serina Therapeutics i.e., Serina Therapeutics and Lipocine go up and down completely randomly.

Pair Corralation between Serina Therapeutics and Lipocine

Considering the 90-day investment horizon Serina Therapeutics is expected to generate 2.9 times less return on investment than Lipocine. In addition to that, Serina Therapeutics is 1.69 times more volatile than Lipocine. It trades about 0.01 of its total potential returns per unit of risk. Lipocine is currently generating about 0.05 per unit of volatility. If you would invest  477.00  in Lipocine on September 19, 2024 and sell it today you would earn a total of  44.00  from holding Lipocine or generate 9.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Serina Therapeutics  vs.  Lipocine

Serina Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Serina Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Serina Therapeutics is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

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.

Pair Trading with Serina Therapeutics and Lipocine

The main advantage of trading using opposite Serina Therapeutics and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Serina Therapeutics 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 Serina Therapeutics 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..