Correlation Between BAE Systems and Lilium Equity
Can any of the company-specific risk be diversified away by investing in both BAE Systems and Lilium Equity 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 BAE Systems and Lilium Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BAE Systems PLC and Lilium Equity Warrants, you can compare the effects of market volatilities on BAE Systems and Lilium Equity 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 BAE Systems with a short position of Lilium Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of BAE Systems and Lilium Equity.
Diversification Opportunities for BAE Systems and Lilium Equity
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BAE and Lilium is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BAE Systems PLC and Lilium Equity Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lilium Equity Warrants and BAE Systems 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 BAE Systems PLC are associated (or correlated) with Lilium Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lilium Equity Warrants has no effect on the direction of BAE Systems i.e., BAE Systems and Lilium Equity go up and down completely randomly.
Pair Corralation between BAE Systems and Lilium Equity
If you would invest 4,131 in BAE Systems PLC on November 19, 2024 and sell it today you would earn a total of 2,059 from holding BAE Systems PLC or generate 49.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
BAE Systems PLC vs. Lilium Equity Warrants
Performance |
| Timeline |
| BAE Systems PLC |
| Lilium Equity Warrants |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
BAE Systems and Lilium Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BAE Systems and Lilium Equity
The main advantage of trading using opposite BAE Systems and Lilium Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BAE Systems position performs unexpectedly, Lilium Equity 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 Equity will offset losses from the drop in Lilium Equity's long position.| BAE Systems vs. Leonardo Spa | BAE Systems vs. QinetiQ Group plc | BAE Systems vs. Leonardo SpA ADR | BAE Systems vs. Huntington Ingalls Industries |
| Lilium Equity vs. Joby Aviation | Lilium Equity vs. Archer Aviation WT | Lilium Equity vs. Lilium NV | Lilium Equity vs. AEye Inc |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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