Correlation Between Li Auto and 570535AW4
Specify exactly 2 symbols:
By analyzing existing cross correlation between Li Auto and MKL 6, you can compare the effects of market volatilities on Li Auto and 570535AW4 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 570535AW4. Check out your portfolio center. Please also check ongoing floating volatility patterns of Li Auto and 570535AW4.
Diversification Opportunities for Li Auto and 570535AW4
Significant diversification
The 3 months correlation between Li Auto and 570535AW4 is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Li Auto and MKL 6 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 570535AW4 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 570535AW4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 570535AW4 has no effect on the direction of Li Auto i.e., Li Auto and 570535AW4 go up and down completely randomly.
Pair Corralation between Li Auto and 570535AW4
Allowing for the 90-day total investment horizon Li Auto is expected to under-perform the 570535AW4. In addition to that, Li Auto is 7.54 times more volatile than MKL 6. It trades about -0.08 of its total potential returns per unit of risk. MKL 6 is currently generating about -0.01 per unit of volatility. If you would invest 10,010 in MKL 6 on September 12, 2024 and sell it today you would lose (10.00) from holding MKL 6 or give up 0.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Li Auto vs. MKL 6
Performance |
| Timeline |
| Li Auto |
| 570535AW4 |
Li Auto and 570535AW4 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Li Auto and 570535AW4
The main advantage of trading using opposite Li Auto and 570535AW4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Li Auto position performs unexpectedly, 570535AW4 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 570535AW4 will offset losses from the drop in 570535AW4's long position.The idea behind Li Auto and MKL 6 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.| 570535AW4 vs. AEP TEX INC | 570535AW4 vs. US BANK NATIONAL | 570535AW4 vs. Alphabet Inc Class C | 570535AW4 vs. InMode |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |