Correlation Between Lizhi and Shutterstock

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

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

Diversification Opportunities for Lizhi and Shutterstock

-0.57

Correlation Coefficient

Lizhi  Shutterstock

Excellent diversification

The 3 months correlation between Lizhi and Shutterstock is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Lizhi Inc and Shutterstock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shutterstock and Lizhi 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 Lizhi Inc are associated (or correlated) with Shutterstock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shutterstock has no effect on the direction of Lizhi i.e., Lizhi and Shutterstock go up and down completely randomly.

Pair Corralation between Lizhi and Shutterstock

If you would invest  80.00  in Lizhi Inc on September 2, 2024 and sell it today you would earn a total of  0.00  from holding Lizhi Inc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	0.4%
Values	Daily Returns

Lizhi Inc  vs.  Shutterstock

Lizhi Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lizhi Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Lizhi is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Shutterstock

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shutterstock has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Shutterstock is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Lizhi and Shutterstock

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

The idea behind Lizhi Inc and Shutterstock 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.