Correlation Between Lilium Equity and Aquagold International

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

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

Diversification Opportunities for Lilium Equity and Aquagold International

0.13

Correlation Coefficient

Lilium Equity  Aquagold International

Average diversification

The 3 months correlation between Lilium and Aquagold is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Lilium Equity Warrants and Aquagold International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquagold International and Lilium Equity 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 Lilium Equity Warrants are associated (or correlated) with Aquagold International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquagold International has no effect on the direction of Lilium Equity i.e., Lilium Equity and Aquagold International go up and down completely randomly.

Pair Corralation between Lilium Equity and Aquagold International

Assuming the 90 days horizon Lilium Equity Warrants is expected to generate 2.27 times more return on investment than Aquagold International. However, Lilium Equity is 2.27 times more volatile than Aquagold International. It trades about 0.07 of its potential returns per unit of risk. Aquagold International is currently generating about 0.0 per unit of risk. If you would invest  10.00  in Lilium Equity Warrants on February 3, 2024 and sell it today you would earn a total of  1.00  from holding Lilium Equity Warrants or generate 10.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Lilium Equity Warrants  vs.  Aquagold International

Lilium Equity Warrants

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lilium Equity Warrants are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting primary indicators, Lilium Equity showed solid returns over the last few months and may actually be approaching a breakup point.

Aquagold International

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aquagold International are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Aquagold International demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lilium Equity and Aquagold International

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

The idea behind Lilium Equity Warrants and Aquagold International 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.