Correlation Between Li Auto and Evertz Technologies
Can any of the company-specific risk be diversified away by investing in both Li Auto and Evertz Technologies 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 Evertz Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Li Auto and Evertz Technologies Limited, you can compare the effects of market volatilities on Li Auto and Evertz Technologies 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 Evertz Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Li Auto and Evertz Technologies.
Diversification Opportunities for Li Auto and Evertz Technologies
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Li Auto and Evertz is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Li Auto and Evertz Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evertz Technologies 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 Evertz Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evertz Technologies has no effect on the direction of Li Auto i.e., Li Auto and Evertz Technologies go up and down completely randomly.
Pair Corralation between Li Auto and Evertz Technologies
Allowing for the 90-day total investment horizon Li Auto is expected to under-perform the Evertz Technologies. In addition to that, Li Auto is 1.65 times more volatile than Evertz Technologies Limited. It trades about -0.04 of its total potential returns per unit of risk. Evertz Technologies Limited is currently generating about -0.02 per unit of volatility. If you would invest 1,016 in Evertz Technologies Limited on September 14, 2024 and sell it today you would lose (142.00) from holding Evertz Technologies Limited or give up 13.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 77.32% |
| Values | Daily Returns |
Li Auto vs. Evertz Technologies Limited
Performance |
| Timeline |
| Li Auto |
| Evertz Technologies |
Li Auto and Evertz Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Li Auto and Evertz Technologies
The main advantage of trading using opposite Li Auto and Evertz Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Li Auto position performs unexpectedly, Evertz Technologies 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 Evertz Technologies will offset losses from the drop in Evertz Technologies' long position.The idea behind Li Auto and Evertz Technologies Limited 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.| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |