Correlation Between KWESST Micro and Lilium Equity
Can any of the company-specific risk be diversified away by investing in both KWESST Micro 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 KWESST Micro and Lilium Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KWESST Micro Systems and Lilium Equity Warrants, you can compare the effects of market volatilities on KWESST Micro 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 KWESST Micro with a short position of Lilium Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of KWESST Micro and Lilium Equity.
Diversification Opportunities for KWESST Micro and Lilium Equity
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KWESST and Lilium is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding KWESST Micro Systems 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 KWESST Micro 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 KWESST Micro Systems 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 KWESST Micro i.e., KWESST Micro and Lilium Equity go up and down completely randomly.
Pair Corralation between KWESST Micro and Lilium Equity
Considering the 90-day investment horizon KWESST Micro Systems is expected to generate 0.89 times more return on investment than Lilium Equity. However, KWESST Micro Systems is 1.12 times less risky than Lilium Equity. It trades about 0.0 of its potential returns per unit of risk. Lilium Equity Warrants is currently generating about -0.15 per unit of risk. If you would invest 144.00 in KWESST Micro Systems on August 31, 2024 and sell it today you would lose (73.00) from holding KWESST Micro Systems or give up 50.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 76.19% |
| Values | Daily Returns |
KWESST Micro Systems vs. Lilium Equity Warrants
Performance |
| Timeline |
| KWESST Micro Systems |
| Lilium Equity Warrants |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
KWESST Micro and Lilium Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KWESST Micro and Lilium Equity
The main advantage of trading using opposite KWESST Micro and Lilium Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KWESST Micro 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.| KWESST Micro vs. Ducommun Incorporated | KWESST Micro vs. Park Electrochemical | KWESST Micro vs. National Presto Industries | KWESST Micro vs. Woodward |
| 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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