Correlation Between Sturm Ruger and Lilium Equity
Can any of the company-specific risk be diversified away by investing in both Sturm Ruger and Lilium 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 Sturm Ruger and Lilium Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sturm Ruger and Lilium Equity Warrants, you can compare the effects of market volatilities on Sturm Ruger and Lilium 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 Sturm Ruger with a short position of Lilium Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sturm Ruger and Lilium Equity.
Diversification Opportunities for Sturm Ruger and Lilium Equity
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sturm and Lilium is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Sturm Ruger and Lilium Equity Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lilium Equity Warrants and Sturm Ruger 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 Sturm Ruger are associated (or correlated) with Lilium Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lilium Equity Warrants has no effect on the direction of Sturm Ruger i.e., Sturm Ruger and Lilium Equity go up and down completely randomly.
Pair Corralation between Sturm Ruger and Lilium Equity
Considering the 90-day investment horizon Sturm Ruger is expected to generate 0.07 times more return on investment than Lilium Equity. However, Sturm Ruger is 14.87 times less risky than Lilium Equity. It trades about -0.1 of its potential returns per unit of risk. Lilium Equity Warrants is currently generating about -0.15 per unit of risk. If you would invest 4,143 in Sturm Ruger on August 31, 2024 and sell it today you would lose (340.00) from holding Sturm Ruger or give up 8.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 76.19% |
| Values | Daily Returns |
Sturm Ruger vs. Lilium Equity Warrants
Performance |
| Timeline |
| Sturm Ruger |
| Lilium Equity Warrants |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sturm Ruger and Lilium Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sturm Ruger and Lilium Equity
The main advantage of trading using opposite Sturm Ruger and Lilium Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sturm Ruger position performs unexpectedly, Lilium 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 Lilium Equity will offset losses from the drop in Lilium Equity's long position.| Sturm Ruger vs. Ammo Inc | Sturm Ruger vs. Kratos Defense Security | Sturm Ruger vs. VSE Corporation | Sturm Ruger vs. Ammo Preferred |
| Lilium Equity vs. Joby Aviation | Lilium Equity vs. Lilium NV | Lilium Equity vs. AEye Inc | Lilium Equity vs. Microvast Holdings |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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