Correlation Between Li Auto and Helix Acquisition
Can any of the company-specific risk be diversified away by investing in both Li Auto and Helix Acquisition 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 Helix Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Li Auto and Helix Acquisition Corp, you can compare the effects of market volatilities on Li Auto and Helix Acquisition 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 Helix Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Li Auto and Helix Acquisition.
Diversification Opportunities for Li Auto and Helix Acquisition
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Li Auto and Helix is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Li Auto and Helix Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helix Acquisition Corp 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 Helix Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helix Acquisition Corp has no effect on the direction of Li Auto i.e., Li Auto and Helix Acquisition go up and down completely randomly.
Pair Corralation between Li Auto and Helix Acquisition
Allowing for the 90-day total investment horizon Li Auto is expected to generate 10.42 times more return on investment than Helix Acquisition. However, Li Auto is 10.42 times more volatile than Helix Acquisition Corp. It trades about 0.27 of its potential returns per unit of risk. Helix Acquisition Corp is currently generating about 0.05 per unit of risk. If you would invest 2,361 in Li Auto on November 28, 2024 and sell it today you would earn a total of 623.00 from holding Li Auto or generate 26.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Li Auto vs. Helix Acquisition Corp
Performance |
| Timeline |
| Li Auto |
| Helix Acquisition Corp |
Li Auto and Helix Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Li Auto and Helix Acquisition
The main advantage of trading using opposite Li Auto and Helix Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Li Auto position performs unexpectedly, Helix Acquisition 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 Helix Acquisition will offset losses from the drop in Helix Acquisition's long position.The idea behind Li Auto and Helix Acquisition Corp 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.| Helix Acquisition vs. Primo Brands | Helix Acquisition vs. Compania Cervecerias Unidas | Helix Acquisition vs. Canada Goose Holdings | Helix Acquisition vs. Rocky Brands |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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