Correlation Between Asset Entities and Lizhi

Can any of the company-specific risk be diversified away by investing in both Asset Entities 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 Asset Entities and Lizhi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Asset Entities Class and Lizhi Inc, you can compare the effects of market volatilities on Asset Entities 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 Asset Entities with a short position of Lizhi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asset Entities and Lizhi.

Diversification Opportunities for Asset Entities and Lizhi

-0.54

Correlation Coefficient

Asset Entities  Lizhi

Excellent diversification

The 3 months correlation between Asset and Lizhi is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Asset Entities Class and Lizhi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lizhi Inc and Asset Entities 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 Asset Entities Class 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 Asset Entities i.e., Asset Entities and Lizhi go up and down completely randomly.

Pair Corralation between Asset Entities and Lizhi

If you would invest  80.00  in Lizhi Inc on August 30, 2024 and sell it today you would earn a total of  0.00  from holding Lizhi Inc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Asset Entities Class  vs.  Lizhi Inc

Asset Entities Class

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asset Entities Class has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Lizhi Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lizhi Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Lizhi is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Asset Entities and Lizhi

The main advantage of trading using opposite Asset Entities and Lizhi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asset Entities 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 Asset Entities Class 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.

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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.