Correlation Between MoneyHero Limited and Lizhi

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

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

Diversification Opportunities for MoneyHero Limited and Lizhi

-0.52

Correlation Coefficient

MoneyHero Limited  Lizhi

Excellent diversification

The 3 months correlation between MoneyHero and Lizhi is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding MoneyHero Limited Class and Lizhi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lizhi Inc and MoneyHero Limited 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 MoneyHero Limited Class 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 MoneyHero Limited i.e., MoneyHero Limited and Lizhi go up and down completely randomly.

Pair Corralation between MoneyHero Limited and Lizhi

Considering the 90-day investment horizon MoneyHero Limited Class is expected to generate 0.5 times more return on investment than Lizhi. However, MoneyHero Limited Class is 1.99 times less risky than Lizhi. It trades about 0.02 of its potential returns per unit of risk. Lizhi Inc is currently generating about 0.01 per unit of risk. If you would invest  110.00  in MoneyHero Limited Class on October 22, 2024 and sell it today you would earn a total of  1.00  from holding MoneyHero Limited Class or generate 0.91% return on investment over 90 days.

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

MoneyHero Limited Class  vs.  Lizhi Inc

MoneyHero Limited Class

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MoneyHero Limited Class are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, MoneyHero Limited is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

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. Even with relatively invariable technical and fundamental indicators, Lizhi is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with MoneyHero Limited and Lizhi

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

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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 Global Correlations module to find global opportunities by holding instruments from different markets.