Correlation Between EQRx and Lilium Equity
Can any of the company-specific risk be diversified away by investing in both EQRx 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 EQRx and Lilium Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EQRx Inc and Lilium Equity Warrants, you can compare the effects of market volatilities on EQRx 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 EQRx with a short position of Lilium Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of EQRx and Lilium Equity.
Diversification Opportunities for EQRx and Lilium Equity
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EQRx and Lilium is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding EQRx Inc 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 EQRx 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 EQRx Inc 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 EQRx i.e., EQRx and Lilium Equity go up and down completely randomly.
Pair Corralation between EQRx and Lilium Equity
If you would invest 19.00 in EQRx Inc on September 1, 2024 and sell it today you would earn a total of 0.00 from holding EQRx Inc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.9% |
| Values | Daily Returns |
EQRx Inc vs. Lilium Equity Warrants
Performance |
| Timeline |
| EQRx Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Lilium Equity Warrants |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
EQRx and Lilium Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EQRx and Lilium Equity
The main advantage of trading using opposite EQRx and Lilium Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EQRx 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 EQRx Inc 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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