Correlation Between Li Auto and Voyager Acquisition

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

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

Diversification Opportunities for Li Auto and Voyager Acquisition

-0.46

Correlation Coefficient

Li Auto  Voyager Acquisition

Very good diversification

The 3 months correlation between Li Auto and Voyager is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Li Auto and Voyager Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voyager Acquisition Corp and Li Auto 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 Li Auto are associated (or correlated) with Voyager Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voyager Acquisition Corp has no effect on the direction of Li Auto i.e., Li Auto and Voyager Acquisition go up and down completely randomly.

Pair Corralation between Li Auto and Voyager Acquisition

Allowing for the 90-day total investment horizon Li Auto is expected to under-perform the Voyager Acquisition. In addition to that, Li Auto is 36.44 times more volatile than Voyager Acquisition Corp. It trades about -0.01 of its total potential returns per unit of risk. Voyager Acquisition Corp is currently generating about 0.03 per unit of volatility. If you would invest  1,004  in Voyager Acquisition Corp on October 6, 2024 and sell it today you would earn a total of  1.00  from holding Voyager Acquisition Corp or generate 0.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.62%
Values	Daily Returns

Li Auto  vs.  Voyager Acquisition Corp

Li Auto

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Li Auto has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Voyager Acquisition Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Voyager Acquisition Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, Voyager Acquisition is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Li Auto and Voyager Acquisition

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

The idea behind Li Auto and Voyager Acquisition Corp 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.