Correlation Between Li Auto and INTERNATIONAL
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By analyzing existing cross correlation between Li Auto and INTERNATIONAL PAPER 44, you can compare the effects of market volatilities on Li Auto and INTERNATIONAL 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 INTERNATIONAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Li Auto and INTERNATIONAL.
Diversification Opportunities for Li Auto and INTERNATIONAL
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Li Auto and INTERNATIONAL is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Li Auto and INTERNATIONAL PAPER 44 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTERNATIONAL PAPER 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 INTERNATIONAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTERNATIONAL PAPER has no effect on the direction of Li Auto i.e., Li Auto and INTERNATIONAL go up and down completely randomly.
Pair Corralation between Li Auto and INTERNATIONAL
Allowing for the 90-day total investment horizon Li Auto is expected to under-perform the INTERNATIONAL. But the stock apears to be less risky and, when comparing its historical volatility, Li Auto is 35.9 times less risky than INTERNATIONAL. The stock trades about 0.0 of its potential returns per unit of risk. The INTERNATIONAL PAPER 44 is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 0.00 in INTERNATIONAL PAPER 44 on August 31, 2024 and sell it today you would earn a total of 7,917 from holding INTERNATIONAL PAPER 44 or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 40.91% |
| Values | Daily Returns |
Li Auto vs. INTERNATIONAL PAPER 44
Performance |
| Timeline |
| Li Auto |
| INTERNATIONAL PAPER |
Li Auto and INTERNATIONAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Li Auto and INTERNATIONAL
The main advantage of trading using opposite Li Auto and INTERNATIONAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Li Auto position performs unexpectedly, INTERNATIONAL 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 INTERNATIONAL will offset losses from the drop in INTERNATIONAL's long position.The idea behind Li Auto and INTERNATIONAL PAPER 44 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.| INTERNATIONAL vs. AEP TEX INC | INTERNATIONAL vs. US BANK NATIONAL | INTERNATIONAL vs. Bank of America | INTERNATIONAL vs. GE Aerospace |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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