Correlation Between Lilium NV and Tat Techno
Can any of the company-specific risk be diversified away by investing in both Lilium NV and Tat Techno 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 Tat Techno into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lilium NV and Tat Techno, you can compare the effects of market volatilities on Lilium NV and Tat Techno 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 Tat Techno. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lilium NV and Tat Techno.
Diversification Opportunities for Lilium NV and Tat Techno
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lilium and Tat is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Lilium NV and Tat Techno in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tat Techno 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 Tat Techno. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tat Techno has no effect on the direction of Lilium NV i.e., Lilium NV and Tat Techno go up and down completely randomly.
Pair Corralation between Lilium NV and Tat Techno
Given the investment horizon of 90 days Lilium NV is expected to generate 6.74 times more return on investment than Tat Techno. However, Lilium NV is 6.74 times more volatile than Tat Techno. It trades about 0.14 of its potential returns per unit of risk. Tat Techno is currently generating about 0.25 per unit of risk. If you would invest 9.76 in Lilium NV on September 2, 2024 and sell it today you would earn a total of 1.24 from holding Lilium NV or generate 12.7% 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. Tat Techno
Performance |
| Timeline |
| Lilium NV |
| Tat Techno |
Lilium NV and Tat Techno Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lilium NV and Tat Techno
The main advantage of trading using opposite Lilium NV and Tat Techno positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lilium NV position performs unexpectedly, Tat Techno 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 Tat Techno will offset losses from the drop in Tat Techno's long position.| Lilium NV vs. Vertical Aerospace | Lilium NV vs. Ehang Holdings | Lilium NV vs. Rocket Lab USA | Lilium NV vs. Archer Aviation |
| Tat Techno vs. Innovative Solutions and | Tat Techno vs. CPI Aerostructures | Tat Techno vs. Air Industries Group | Tat Techno vs. Ballistic Recovery Systems |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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