Correlation Between Li Auto and Spectaire Holdings

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Can any of the company-specific risk be diversified away by investing in both Li Auto and Spectaire Holdings 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 Spectaire Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Li Auto and Spectaire Holdings, you can compare the effects of market volatilities on Li Auto and Spectaire Holdings 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 Spectaire Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Li Auto and Spectaire Holdings.

Diversification Opportunities for Li Auto and Spectaire Holdings

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Li Auto and Spectaire is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Li Auto and Spectaire Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectaire Holdings 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 Spectaire Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectaire Holdings has no effect on the direction of Li Auto i.e., Li Auto and Spectaire Holdings go up and down completely randomly.

Pair Corralation between Li Auto and Spectaire Holdings

If you would invest  1,887  in Li Auto on September 7, 2024 and sell it today you would earn a total of  366.00  from holding Li Auto or generate 19.4% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy1.56%
ValuesDaily Returns

Li Auto  vs.  Spectaire Holdings

 Performance 
       Timeline  
Li Auto 

Risk-Adjusted Performance

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Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Li Auto are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating forward indicators, Li Auto demonstrated solid returns over the last few months and may actually be approaching a breakup point.
Spectaire Holdings 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Spectaire Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Spectaire Holdings is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Li Auto and Spectaire Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Li Auto and Spectaire Holdings

The main advantage of trading using opposite Li Auto and Spectaire Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Li Auto position performs unexpectedly, Spectaire Holdings 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 Spectaire Holdings will offset losses from the drop in Spectaire Holdings' long position.
The idea behind Li Auto and Spectaire Holdings 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.
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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