Correlation Between Shutterstock and Lizhi
Can any of the company-specific risk be diversified away by investing in both Shutterstock and Lizhi 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 Shutterstock and Lizhi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shutterstock and Lizhi Inc, you can compare the effects of market volatilities on Shutterstock and Lizhi 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 Shutterstock with a short position of Lizhi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shutterstock and Lizhi.
Diversification Opportunities for Shutterstock and Lizhi
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shutterstock and Lizhi is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Shutterstock and Lizhi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lizhi Inc and Shutterstock 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 Shutterstock are associated (or correlated) with Lizhi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lizhi Inc has no effect on the direction of Shutterstock i.e., Shutterstock and Lizhi go up and down completely randomly.
Pair Corralation between Shutterstock and Lizhi
Given the investment horizon of 90 days Shutterstock is expected to generate 0.55 times more return on investment than Lizhi. However, Shutterstock is 1.83 times less risky than Lizhi. It trades about -0.02 of its potential returns per unit of risk. Lizhi Inc is currently generating about -0.04 per unit of risk. If you would invest 4,757 in Shutterstock on August 31, 2024 and sell it today you would lose (1,589) from holding Shutterstock or give up 33.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 8.56% |
| Values | Daily Returns |
Shutterstock vs. Lizhi Inc
Performance |
| Timeline |
| Shutterstock |
| Lizhi Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Shutterstock and Lizhi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shutterstock and Lizhi
The main advantage of trading using opposite Shutterstock and Lizhi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shutterstock position performs unexpectedly, Lizhi 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 Lizhi will offset losses from the drop in Lizhi's long position.| Shutterstock vs. Yelp Inc | Shutterstock vs. Match Group | Shutterstock vs. Snap Inc | Shutterstock vs. Onfolio 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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