Correlation Between Vita Mobile and Lizhi
Can any of the company-specific risk be diversified away by investing in both Vita Mobile 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 Vita Mobile and Lizhi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vita Mobile Systems and Lizhi Inc, you can compare the effects of market volatilities on Vita Mobile 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 Vita Mobile with a short position of Lizhi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vita Mobile and Lizhi.
Diversification Opportunities for Vita Mobile and Lizhi
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vita and Lizhi is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Vita Mobile Systems and Lizhi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lizhi Inc and Vita 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 Vita Mobile Systems 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 Vita Mobile i.e., Vita Mobile and Lizhi go up and down completely randomly.
Pair Corralation between Vita Mobile and Lizhi
Given the investment horizon of 90 days Vita Mobile Systems is expected to generate 2.5 times more return on investment than Lizhi. However, Vita Mobile is 2.5 times more volatile than Lizhi Inc. It trades about 0.04 of its potential returns per unit of risk. Lizhi Inc is currently generating about 0.03 per unit of risk. If you would invest 0.12 in Vita Mobile Systems on August 26, 2024 and sell it today you would lose (0.02) from holding Vita Mobile Systems or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 28.93% |
| Values | Daily Returns |
Vita Mobile Systems vs. Lizhi Inc
Performance |
| Timeline |
| Vita Mobile Systems |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Lizhi Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Vita Mobile and Lizhi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vita Mobile and Lizhi
The main advantage of trading using opposite Vita Mobile and Lizhi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vita Mobile 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.| Vita Mobile vs. DouYu International Holdings | Vita Mobile vs. Tencent Music Entertainment | Vita Mobile vs. Weibo Corp | Vita Mobile vs. PropertyGuru Group |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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