Correlation Between Fiverr International and Lizhi
Can any of the company-specific risk be diversified away by investing in both Fiverr International and Lizhi 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 Fiverr International and Lizhi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fiverr International and Lizhi Inc, you can compare the effects of market volatilities on Fiverr International and Lizhi 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 Fiverr International with a short position of Lizhi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiverr International and Lizhi.
Diversification Opportunities for Fiverr International and Lizhi
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fiverr and Lizhi is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Fiverr International and Lizhi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lizhi Inc and Fiverr International 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 Fiverr International are associated (or correlated) with Lizhi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lizhi Inc has no effect on the direction of Fiverr International i.e., Fiverr International and Lizhi go up and down completely randomly.
Pair Corralation between Fiverr International and Lizhi
Given the investment horizon of 90 days Fiverr International is expected to generate 0.67 times more return on investment than Lizhi. However, Fiverr International is 1.49 times less risky than Lizhi. It trades about 0.02 of its potential returns per unit of risk. Lizhi Inc is currently generating about -0.03 per unit of risk. If you would invest 3,228 in Fiverr International on August 26, 2024 and sell it today you would lose (17.00) from holding Fiverr International or give up 0.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fiverr International vs. Lizhi Inc
Performance |
| Timeline |
| Fiverr International |
| Lizhi Inc |
Fiverr International and Lizhi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fiverr International and Lizhi
The main advantage of trading using opposite Fiverr International and Lizhi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiverr International position performs unexpectedly, Lizhi 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 Lizhi will offset losses from the drop in Lizhi's long position.| Fiverr International vs. Snap Inc | Fiverr International vs. Twilio Inc | Fiverr International vs. Spotify Technology SA | Fiverr International vs. Baidu Inc |
| Lizhi vs. Integral Ad Science | Lizhi vs. Playtika Holding Corp | Lizhi vs. Zhihu Inc ADR | Lizhi vs. Pinterest |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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