Correlation Between Lilium NV and HEICO
Can any of the company-specific risk be diversified away by investing in both Lilium NV and HEICO 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 Lilium NV and HEICO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lilium NV and HEICO, you can compare the effects of market volatilities on Lilium NV and HEICO 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 Lilium NV with a short position of HEICO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lilium NV and HEICO.
Diversification Opportunities for Lilium NV and HEICO
Good diversification
The 3 months correlation between Lilium and HEICO is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Lilium NV and HEICO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEICO and Lilium NV 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 Lilium NV are associated (or correlated) with HEICO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEICO has no effect on the direction of Lilium NV i.e., Lilium NV and HEICO go up and down completely randomly.
Pair Corralation between Lilium NV and HEICO
Given the investment horizon of 90 days Lilium NV is expected to generate 19.84 times more return on investment than HEICO. However, Lilium NV is 19.84 times more volatile than HEICO. It trades about 0.07 of its potential returns per unit of risk. HEICO is currently generating about 0.31 per unit of risk. If you would invest 14.00 in Lilium NV on August 28, 2024 and sell it today you would lose (4.01) from holding Lilium NV or give up 28.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lilium NV vs. HEICO
Performance |
| Timeline |
| Lilium NV |
| HEICO |
Lilium NV and HEICO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lilium NV and HEICO
The main advantage of trading using opposite Lilium NV and HEICO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lilium NV position performs unexpectedly, HEICO 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 HEICO will offset losses from the drop in HEICO's long position.| Lilium NV vs. Vertical Aerospace | Lilium NV vs. Ehang Holdings | Lilium NV vs. Rocket Lab USA | Lilium NV vs. Archer Aviation |
| HEICO vs. Vertical Aerospace | HEICO vs. Rolls Royce Holdings plc | HEICO vs. Embraer SA ADR | HEICO vs. Rocket Lab USA |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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