Correlation Between Innovative Solutions and Lilium Equity

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

By analyzing existing cross correlation between Innovative Solutions and and Lilium Equity Warrants, you can compare the effects of market volatilities on Innovative Solutions and Lilium Equity 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 Innovative Solutions with a short position of Lilium Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovative Solutions and Lilium Equity.

Diversification Opportunities for Innovative Solutions and Lilium Equity

-0.6

Correlation Coefficient

Innovative Solutions  Lilium Equity

Excellent diversification

The 3 months correlation between Innovative and Lilium is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Innovative Solutions and and Lilium Equity Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lilium Equity Warrants and Innovative Solutions 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 Innovative Solutions and are associated (or correlated) with Lilium Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lilium Equity Warrants has no effect on the direction of Innovative Solutions i.e., Innovative Solutions and Lilium Equity go up and down completely randomly.

Pair Corralation between Innovative Solutions and Lilium Equity

Given the investment horizon of 90 days Innovative Solutions and is expected to generate 0.1 times more return on investment than Lilium Equity. However, Innovative Solutions and is 10.01 times less risky than Lilium Equity. It trades about 0.09 of its potential returns per unit of risk. Lilium Equity Warrants is currently generating about -0.15 per unit of risk. If you would invest  701.00  in Innovative Solutions and on September 3, 2024 and sell it today you would earn a total of  75.00  from holding Innovative Solutions and or generate 10.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	75.0%
Values	Daily Returns

Innovative Solutions and  vs.  Lilium Equity Warrants

Innovative Solutions and

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Innovative Solutions and are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Innovative Solutions may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Lilium Equity Warrants

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lilium Equity Warrants has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's primary indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Innovative Solutions and Lilium Equity

The main advantage of trading using opposite Innovative Solutions and Lilium Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovative Solutions position performs unexpectedly, Lilium Equity 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 Lilium Equity will offset losses from the drop in Lilium Equity's long position.

The idea behind Innovative Solutions and and Lilium Equity Warrants 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.