Correlation Between Axon Enterprise and Lilium NV
Can any of the company-specific risk be diversified away by investing in both Axon Enterprise and Lilium NV 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 Axon Enterprise and Lilium NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axon Enterprise and Lilium NV, you can compare the effects of market volatilities on Axon Enterprise and Lilium NV 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 Axon Enterprise with a short position of Lilium NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axon Enterprise and Lilium NV.
Diversification Opportunities for Axon Enterprise and Lilium NV
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Axon and Lilium is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Axon Enterprise and Lilium NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lilium NV and Axon Enterprise 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 Axon Enterprise are associated (or correlated) with Lilium NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lilium NV has no effect on the direction of Axon Enterprise i.e., Axon Enterprise and Lilium NV go up and down completely randomly.
Pair Corralation between Axon Enterprise and Lilium NV
Given the investment horizon of 90 days Axon Enterprise is expected to generate 0.28 times more return on investment than Lilium NV. However, Axon Enterprise is 3.59 times less risky than Lilium NV. It trades about 0.14 of its potential returns per unit of risk. Lilium NV is currently generating about -0.04 per unit of risk. If you would invest 19,361 in Axon Enterprise on August 28, 2024 and sell it today you would earn a total of 42,539 from holding Axon Enterprise or generate 219.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Axon Enterprise vs. Lilium NV
Performance |
| Timeline |
| Axon Enterprise |
| Lilium NV |
Axon Enterprise and Lilium NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axon Enterprise and Lilium NV
The main advantage of trading using opposite Axon Enterprise and Lilium NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axon Enterprise position performs unexpectedly, Lilium NV 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 Lilium NV will offset losses from the drop in Lilium NV's long position.| Axon Enterprise vs. Novocure | Axon Enterprise vs. HubSpot | Axon Enterprise vs. DigitalOcean Holdings | Axon Enterprise vs. Appian Corp |
| Lilium NV vs. Vertical Aerospace | Lilium NV vs. Ehang Holdings | Lilium NV vs. Rocket Lab USA | Lilium NV vs. Archer Aviation |
Check out your portfolio center.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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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