Correlation Between BKSY WT and Lilium Equity
Can any of the company-specific risk be diversified away by investing in both BKSY WT 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 BKSY WT and Lilium Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BKSY WT and Lilium Equity Warrants, you can compare the effects of market volatilities on BKSY WT 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 BKSY WT with a short position of Lilium Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of BKSY WT and Lilium Equity.
Diversification Opportunities for BKSY WT and Lilium Equity
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BKSY and Lilium is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding BKSY WT 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 BKSY WT 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 BKSY WT 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 BKSY WT i.e., BKSY WT and Lilium Equity go up and down completely randomly.
Pair Corralation between BKSY WT and Lilium Equity
Assuming the 90 days trading horizon BKSY WT is expected to generate 1.24 times more return on investment than Lilium Equity. However, BKSY WT is 1.24 times more volatile than Lilium Equity Warrants. It trades about 0.12 of its potential returns per unit of risk. Lilium Equity Warrants is currently generating about 0.03 per unit of risk. If you would invest 3.45 in BKSY WT on August 31, 2024 and sell it today you would earn a total of 3.96 from holding BKSY WT or generate 114.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 22.94% |
| Values | Daily Returns |
BKSY WT vs. Lilium Equity Warrants
Performance |
| Timeline |
| BKSY WT |
| Lilium Equity Warrants |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
BKSY WT and Lilium Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BKSY WT and Lilium Equity
The main advantage of trading using opposite BKSY WT and Lilium Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BKSY WT 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.The idea behind BKSY WT and Lilium Equity Warrants 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.| Lilium Equity vs. Joby Aviation | Lilium Equity vs. Lilium NV | Lilium Equity vs. AEye Inc | Lilium Equity vs. Microvast Holdings |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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