Correlation Between Lilium NV and Park Electrochemical
Can any of the company-specific risk be diversified away by investing in both Lilium NV and Park Electrochemical 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 Park Electrochemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lilium NV and Park Electrochemical, you can compare the effects of market volatilities on Lilium NV and Park Electrochemical 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 Park Electrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lilium NV and Park Electrochemical.
Diversification Opportunities for Lilium NV and Park Electrochemical
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lilium and Park is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Lilium NV and Park Electrochemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Park Electrochemical 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 Park Electrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Park Electrochemical has no effect on the direction of Lilium NV i.e., Lilium NV and Park Electrochemical go up and down completely randomly.
Pair Corralation between Lilium NV and Park Electrochemical
Given the investment horizon of 90 days Lilium NV is expected to under-perform the Park Electrochemical. In addition to that, Lilium NV is 4.69 times more volatile than Park Electrochemical. It trades about -0.01 of its total potential returns per unit of risk. Park Electrochemical is currently generating about 0.03 per unit of volatility. If you would invest 1,214 in Park Electrochemical on September 3, 2024 and sell it today you would earn a total of 317.00 from holding Park Electrochemical or generate 26.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lilium NV vs. Park Electrochemical
Performance |
| Timeline |
| Lilium NV |
| Park Electrochemical |
Lilium NV and Park Electrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lilium NV and Park Electrochemical
The main advantage of trading using opposite Lilium NV and Park Electrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lilium NV position performs unexpectedly, Park Electrochemical 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 Park Electrochemical will offset losses from the drop in Park Electrochemical's long position.| Lilium NV vs. Vertical Aerospace | Lilium NV vs. Ehang Holdings | Lilium NV vs. Rocket Lab USA | Lilium NV vs. Archer Aviation |
| Park Electrochemical vs. Innovative Solutions and | Park Electrochemical vs. VSE Corporation | Park Electrochemical vs. Curtiss Wright | Park Electrochemical vs. Ducommun Incorporated |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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