Correlation Between Yunji and Lizhi
Can any of the company-specific risk be diversified away by investing in both Yunji 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 Yunji and Lizhi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yunji Inc and Lizhi Inc, you can compare the effects of market volatilities on Yunji 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 Yunji with a short position of Lizhi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yunji and Lizhi.
Diversification Opportunities for Yunji and Lizhi
Very weak diversification
The 3 months correlation between Yunji and Lizhi is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Yunji Inc and Lizhi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lizhi Inc and Yunji 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 Yunji Inc 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 Yunji i.e., Yunji and Lizhi go up and down completely randomly.
Pair Corralation between Yunji and Lizhi
Allowing for the 90-day total investment horizon Yunji Inc is expected to under-perform the Lizhi. In addition to that, Yunji is 1.68 times more volatile than Lizhi Inc. It trades about -0.02 of its total potential returns per unit of risk. Lizhi Inc is currently generating about -0.02 per unit of volatility. If you would invest 228.00 in Lizhi Inc on September 1, 2024 and sell it today you would lose (44.00) from holding Lizhi Inc or give up 19.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yunji Inc vs. Lizhi Inc
Performance |
| Timeline |
| Yunji Inc |
| Lizhi Inc |
Yunji and Lizhi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yunji and Lizhi
The main advantage of trading using opposite Yunji and Lizhi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yunji 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.The idea behind Yunji Inc and Lizhi Inc 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.| Lizhi vs. National Beverage Corp | Lizhi vs. China Tontine Wines | Lizhi vs. Treasury Wine Estates | Lizhi vs. Highway Holdings Limited |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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