Correlation Between ANT and Lizhi

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

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

Diversification Opportunities for ANT and Lizhi

0.2

Correlation Coefficient

ANT  Lizhi

Modest diversification

The 3 months correlation between ANT and Lizhi is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding ANT and Lizhi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lizhi Inc and ANT 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 ANT 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 ANT i.e., ANT and Lizhi go up and down completely randomly.

Pair Corralation between ANT and Lizhi

Assuming the 90 days trading horizon ANT is expected to generate 9.42 times more return on investment than Lizhi. However, ANT is 9.42 times more volatile than Lizhi Inc. It trades about 0.14 of its potential returns per unit of risk. Lizhi Inc is currently generating about 0.03 per unit of risk. If you would invest  1,060  in ANT on October 23, 2024 and sell it today you would lose (913.00) from holding ANT or give up 86.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

ANT  vs.  Lizhi Inc

ANT

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ANT are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, ANT exhibited solid returns over the last few months and may actually be approaching a breakup point.

Lizhi Inc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lizhi Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady technical and fundamental indicators, Lizhi reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ANT and Lizhi

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

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.