Correlation Between Mink Therapeutics and Lipocine

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

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

Diversification Opportunities for Mink Therapeutics and Lipocine

-0.76

Correlation Coefficient

Mink Therapeutics  Lipocine

Pay attention - limited upside

The 3 months correlation between Mink and Lipocine is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Mink Therapeutics and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine and Mink 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 Mink 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 Mink Therapeutics i.e., Mink Therapeutics and Lipocine go up and down completely randomly.

Pair Corralation between Mink Therapeutics and Lipocine

Given the investment horizon of 90 days Mink Therapeutics is expected to under-perform the Lipocine. In addition to that, Mink Therapeutics is 1.07 times more volatile than Lipocine. It trades about -0.02 of its total potential returns per unit of risk. Lipocine is currently generating about 0.01 per unit of volatility. If you would invest  765.00  in Lipocine on August 21, 2024 and sell it today you would lose (293.00) from holding Lipocine or give up 38.3% of portfolio value over 90 days.

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

Mink Therapeutics  vs.  Lipocine

Mink Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mink Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward-looking signals remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Lipocine

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lipocine are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile fundamental indicators, Lipocine displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mink Therapeutics and Lipocine

The main advantage of trading using opposite Mink Therapeutics and Lipocine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mink 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 Mink 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.