Correlation Between Lizhi and ANGI Homeservices
Can any of the company-specific risk be diversified away by investing in both Lizhi and ANGI Homeservices 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 Lizhi and ANGI Homeservices into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lizhi Inc and ANGI Homeservices, you can compare the effects of market volatilities on Lizhi and ANGI Homeservices 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 Lizhi with a short position of ANGI Homeservices. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lizhi and ANGI Homeservices.
Diversification Opportunities for Lizhi and ANGI Homeservices
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lizhi and ANGI is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Lizhi Inc and ANGI Homeservices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGI Homeservices and Lizhi 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 Lizhi Inc are associated (or correlated) with ANGI Homeservices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGI Homeservices has no effect on the direction of Lizhi i.e., Lizhi and ANGI Homeservices go up and down completely randomly.
Pair Corralation between Lizhi and ANGI Homeservices
Given the investment horizon of 90 days Lizhi Inc is expected to under-perform the ANGI Homeservices. In addition to that, Lizhi is 1.2 times more volatile than ANGI Homeservices. It trades about -0.04 of its total potential returns per unit of risk. ANGI Homeservices is currently generating about -0.01 per unit of volatility. If you would invest 316.00 in ANGI Homeservices on August 31, 2024 and sell it today you would lose (130.00) from holding ANGI Homeservices or give up 41.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 8.56% |
| Values | Daily Returns |
Lizhi Inc vs. ANGI Homeservices
Performance |
| Timeline |
| Lizhi Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ANGI Homeservices |
Lizhi and ANGI Homeservices Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lizhi and ANGI Homeservices
The main advantage of trading using opposite Lizhi and ANGI Homeservices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lizhi position performs unexpectedly, ANGI Homeservices 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 ANGI Homeservices will offset losses from the drop in ANGI Homeservices' long position.The idea behind Lizhi Inc and ANGI Homeservices pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| ANGI Homeservices vs. Match Group | ANGI Homeservices vs. Outbrain | ANGI Homeservices vs. MediaAlpha | ANGI Homeservices vs. YY Inc 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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