Correlation Between Lilium NV and Draganfly

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

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

Diversification Opportunities for Lilium NV and Draganfly

0.32

Correlation Coefficient

Lilium NV  Draganfly

Weak diversification

The 3 months correlation between Lilium and Draganfly is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Lilium NV and Draganfly in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Draganfly and Lilium NV 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 NV are associated (or correlated) with Draganfly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Draganfly has no effect on the direction of Lilium NV i.e., Lilium NV and Draganfly go up and down completely randomly.

Pair Corralation between Lilium NV and Draganfly

Given the investment horizon of 90 days Lilium NV is expected to generate 5.18 times more return on investment than Draganfly. However, Lilium NV is 5.18 times more volatile than Draganfly. It trades about 0.1 of its potential returns per unit of risk. Draganfly is currently generating about -0.08 per unit of risk. If you would invest  11.00  in Lilium NV on November 28, 2024 and sell it today you would lose (4.01) from holding Lilium NV or give up 36.45% of portfolio value over 90 days.

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

Lilium NV  vs.  Draganfly

Lilium NV

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lilium NV are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting essential indicators, Lilium NV displayed solid returns over the last few months and may actually be approaching a breakup point.

Draganfly

Risk-Adjusted Performance

Very Weak

Over the last 90 days Draganfly has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Lilium NV and Draganfly

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

The idea behind Lilium NV and Draganfly 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.