Correlation Between Li Auto and Shimmick Common
Can any of the company-specific risk be diversified away by investing in both Li Auto and Shimmick Common 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 Shimmick Common into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Li Auto and Shimmick Common, you can compare the effects of market volatilities on Li Auto and Shimmick Common 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 Shimmick Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of Li Auto and Shimmick Common.
Diversification Opportunities for Li Auto and Shimmick Common
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Li Auto and Shimmick is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Li Auto and Shimmick Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shimmick Common 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 Shimmick Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shimmick Common has no effect on the direction of Li Auto i.e., Li Auto and Shimmick Common go up and down completely randomly.
Pair Corralation between Li Auto and Shimmick Common
Allowing for the 90-day total investment horizon Li Auto is expected to generate 4.08 times less return on investment than Shimmick Common. But when comparing it to its historical volatility, Li Auto is 2.25 times less risky than Shimmick Common. It trades about 0.04 of its potential returns per unit of risk. Shimmick Common is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 176.00 in Shimmick Common on September 3, 2024 and sell it today you would earn a total of 104.00 from holding Shimmick Common or generate 59.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Li Auto vs. Shimmick Common
Performance |
| Timeline |
| Li Auto |
| Shimmick Common |
Li Auto and Shimmick Common Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Li Auto and Shimmick Common
The main advantage of trading using opposite Li Auto and Shimmick Common positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Li Auto position performs unexpectedly, Shimmick Common 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 Shimmick Common will offset losses from the drop in Shimmick Common's long position.| Li Auto vs. GreenPower Motor | Li Auto vs. ZEEKR Intelligent Technology | Li Auto vs. Volcon Inc | Li Auto vs. Ford Motor |
| Shimmick Common vs. Universal | Shimmick Common vs. Scandinavian Tobacco Group | Shimmick Common vs. Proficient Auto Logistics, | Shimmick Common vs. Mesa Air Group |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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