Correlation Between Li Auto and Brickell Biotech
Can any of the company-specific risk be diversified away by investing in both Li Auto and Brickell Biotech 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 Li Auto and Brickell Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Li Auto and Brickell Biotech, you can compare the effects of market volatilities on Li Auto and Brickell Biotech 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 Li Auto with a short position of Brickell Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Li Auto and Brickell Biotech.
Diversification Opportunities for Li Auto and Brickell Biotech
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Li Auto and Brickell is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Li Auto and Brickell Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brickell Biotech and Li Auto 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 Li Auto are associated (or correlated) with Brickell Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brickell Biotech has no effect on the direction of Li Auto i.e., Li Auto and Brickell Biotech go up and down completely randomly.
Pair Corralation between Li Auto and Brickell Biotech
If you would invest 2,235 in Li Auto on September 14, 2024 and sell it today you would earn a total of 44.00 from holding Li Auto or generate 1.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Li Auto vs. Brickell Biotech
Performance |
| Timeline |
| Li Auto |
| Brickell Biotech |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Li Auto and Brickell Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Li Auto and Brickell Biotech
The main advantage of trading using opposite Li Auto and Brickell Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Li Auto position performs unexpectedly, Brickell Biotech 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 Brickell Biotech will offset losses from the drop in Brickell Biotech's long position.The idea behind Li Auto and Brickell Biotech 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.| Brickell Biotech vs. Sabre Corpo | Brickell Biotech vs. Griffon | Brickell Biotech vs. Ispire Technology Common | Brickell Biotech vs. Enersys |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |