Correlation Between Lilium Equity and Aeye
Can any of the company-specific risk be diversified away by investing in both Lilium Equity and Aeye 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 Equity and Aeye into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lilium Equity Warrants and Aeye Inc, you can compare the effects of market volatilities on Lilium Equity and Aeye 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 Equity with a short position of Aeye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lilium Equity and Aeye.
Diversification Opportunities for Lilium Equity and Aeye
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lilium and Aeye is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Lilium Equity Warrants and Aeye Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeye Inc and Lilium Equity 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 Equity Warrants are associated (or correlated) with Aeye. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeye Inc has no effect on the direction of Lilium Equity i.e., Lilium Equity and Aeye go up and down completely randomly.
Pair Corralation between Lilium Equity and Aeye
Assuming the 90 days horizon Lilium Equity Warrants is expected to generate 1.26 times more return on investment than Aeye. However, Lilium Equity is 1.26 times more volatile than Aeye Inc. It trades about 0.0 of its potential returns per unit of risk. Aeye Inc is currently generating about -0.01 per unit of risk. If you would invest 13.00 in Lilium Equity Warrants on September 1, 2024 and sell it today you would lose (12.30) from holding Lilium Equity Warrants or give up 94.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.42% |
| Values | Daily Returns |
Lilium Equity Warrants vs. Aeye Inc
Performance |
| Timeline |
| Lilium Equity Warrants |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Aeye Inc |
Lilium Equity and Aeye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lilium Equity and Aeye
The main advantage of trading using opposite Lilium Equity and Aeye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lilium Equity position performs unexpectedly, Aeye 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 Aeye will offset losses from the drop in Aeye's long position.| Lilium Equity vs. Joby Aviation | Lilium Equity vs. Lilium NV | Lilium Equity vs. AEye Inc | Lilium Equity vs. Microvast Holdings |
| Aeye vs. Innoviz Technologies | Aeye vs. Hesai Group American | Aeye vs. Luminar Technologies | Aeye vs. Mobileye Global Class |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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