Correlation Between Evertz Technologies and Li Auto
Can any of the company-specific risk be diversified away by investing in both Evertz Technologies and Li Auto 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 Evertz Technologies and Li Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evertz Technologies Limited and Li Auto, you can compare the effects of market volatilities on Evertz Technologies and Li Auto 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 Evertz Technologies with a short position of Li Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evertz Technologies and Li Auto.
Diversification Opportunities for Evertz Technologies and Li Auto
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Evertz and Li Auto is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Evertz Technologies Limited and Li Auto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Li Auto and Evertz Technologies 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 Evertz Technologies Limited are associated (or correlated) with Li Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Li Auto has no effect on the direction of Evertz Technologies i.e., Evertz Technologies and Li Auto go up and down completely randomly.
Pair Corralation between Evertz Technologies and Li Auto
Assuming the 90 days horizon Evertz Technologies is expected to generate 1.07 times less return on investment than Li Auto. But when comparing it to its historical volatility, Evertz Technologies Limited is 4.31 times less risky than Li Auto. It trades about 0.05 of its potential returns per unit of risk. Li Auto is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,223 in Li Auto on September 15, 2024 and sell it today you would lose (3.00) from holding Li Auto or give up 0.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Evertz Technologies Limited vs. Li Auto
Performance |
| Timeline |
| Evertz Technologies |
| Li Auto |
Evertz Technologies and Li Auto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evertz Technologies and Li Auto
The main advantage of trading using opposite Evertz Technologies and Li Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evertz Technologies position performs unexpectedly, Li Auto 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 Li Auto will offset losses from the drop in Li Auto's long position.| Evertz Technologies vs. Deere Company | Evertz Technologies vs. Caterpillar | Evertz Technologies vs. Lion Electric Corp | Evertz Technologies vs. Nikola Corp |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |