Correlation Between Li Auto and WiMi Hologram
Can any of the company-specific risk be diversified away by investing in both Li Auto and WiMi Hologram 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 WiMi Hologram into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Li Auto and WiMi Hologram Cloud, you can compare the effects of market volatilities on Li Auto and WiMi Hologram 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 WiMi Hologram. Check out your portfolio center. Please also check ongoing floating volatility patterns of Li Auto and WiMi Hologram.
Diversification Opportunities for Li Auto and WiMi Hologram
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Li Auto and WiMi is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Li Auto and WiMi Hologram Cloud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WiMi Hologram Cloud 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 WiMi Hologram. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WiMi Hologram Cloud has no effect on the direction of Li Auto i.e., Li Auto and WiMi Hologram go up and down completely randomly.
Pair Corralation between Li Auto and WiMi Hologram
Allowing for the 90-day total investment horizon Li Auto is expected to under-perform the WiMi Hologram. In addition to that, Li Auto is 1.02 times more volatile than WiMi Hologram Cloud. It trades about -0.06 of its total potential returns per unit of risk. WiMi Hologram Cloud is currently generating about 0.0 per unit of volatility. If you would invest 84.00 in WiMi Hologram Cloud on September 1, 2024 and sell it today you would lose (1.00) from holding WiMi Hologram Cloud or give up 1.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Li Auto vs. WiMi Hologram Cloud
Performance |
| Timeline |
| Li Auto |
| WiMi Hologram Cloud |
Li Auto and WiMi Hologram Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Li Auto and WiMi Hologram
The main advantage of trading using opposite Li Auto and WiMi Hologram positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Li Auto position performs unexpectedly, WiMi Hologram 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 WiMi Hologram will offset losses from the drop in WiMi Hologram's long position.The idea behind Li Auto and WiMi Hologram Cloud 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.| WiMi Hologram vs. ADTRAN Inc | WiMi Hologram vs. Belden Inc | WiMi Hologram vs. ADC Therapeutics SA | WiMi Hologram vs. Comtech Telecommunications Corp |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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