Correlation Between Socket Mobile and Li Auto
Can any of the company-specific risk be diversified away by investing in both Socket Mobile and Li Auto 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 Socket Mobile and Li Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Socket Mobile and Li Auto, you can compare the effects of market volatilities on Socket Mobile and Li Auto 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 Socket Mobile with a short position of Li Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Socket Mobile and Li Auto.
Diversification Opportunities for Socket Mobile and Li Auto
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Socket and Li Auto is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Socket Mobile and Li Auto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Li Auto and Socket Mobile 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 Socket Mobile are associated (or correlated) with Li Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Li Auto has no effect on the direction of Socket Mobile i.e., Socket Mobile and Li Auto go up and down completely randomly.
Pair Corralation between Socket Mobile and Li Auto
Given the investment horizon of 90 days Socket Mobile is expected to generate 1.58 times more return on investment than Li Auto. However, Socket Mobile is 1.58 times more volatile than Li Auto. It trades about 0.17 of its potential returns per unit of risk. Li Auto is currently generating about 0.03 per unit of risk. If you would invest 122.00 in Socket Mobile on September 13, 2024 and sell it today you would earn a total of 20.00 from holding Socket Mobile or generate 16.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Socket Mobile vs. Li Auto
Performance |
| Timeline |
| Socket Mobile |
| Li Auto |
Socket Mobile and Li Auto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Socket Mobile and Li Auto
The main advantage of trading using opposite Socket Mobile and Li Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Socket Mobile position performs unexpectedly, Li Auto 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 Li Auto will offset losses from the drop in Li Auto's long position.| Socket Mobile vs. Cricut Inc | Socket Mobile vs. Nano Dimension | Socket Mobile vs. IONQ Inc | Socket Mobile vs. AGM Group 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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