Correlation Between Lilium Equity and Xos Equity
Can any of the company-specific risk be diversified away by investing in both Lilium Equity and Xos Equity 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 Xos Equity 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 Xos Equity Warrants, you can compare the effects of market volatilities on Lilium Equity and Xos Equity 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 Xos Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lilium Equity and Xos Equity.
Diversification Opportunities for Lilium Equity and Xos Equity
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lilium and Xos is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Lilium Equity Warrants and Xos Equity Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xos Equity Warrants 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 Xos Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xos Equity Warrants has no effect on the direction of Lilium Equity i.e., Lilium Equity and Xos Equity go up and down completely randomly.
Pair Corralation between Lilium Equity and Xos Equity
Assuming the 90 days horizon Lilium Equity Warrants is expected to under-perform the Xos Equity. But the pink sheet apears to be less risky and, when comparing its historical volatility, Lilium Equity Warrants is 6.65 times less risky than Xos Equity. The pink sheet trades about 0.0 of its potential returns per unit of risk. The Xos Equity Warrants is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4.80 in Xos Equity Warrants on September 1, 2024 and sell it today you would lose (4.38) from holding Xos Equity Warrants or give up 91.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.43% |
| Values | Daily Returns |
Lilium Equity Warrants vs. Xos Equity Warrants
Performance |
| Timeline |
| Lilium Equity Warrants |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Xos Equity Warrants |
Lilium Equity and Xos Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lilium Equity and Xos Equity
The main advantage of trading using opposite Lilium Equity and Xos Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lilium Equity position performs unexpectedly, Xos Equity 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 Xos Equity will offset losses from the drop in Xos Equity's long position.| Lilium Equity vs. Joby Aviation | Lilium Equity vs. Lilium NV | Lilium Equity vs. AEye Inc | Lilium Equity vs. Microvast Holdings |
| Xos Equity vs. Ford Motor | Xos Equity vs. General Motors | Xos Equity vs. Goodyear Tire Rubber | Xos Equity vs. Li Auto |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |