Correlation Between Skillful Craftsman and Lixiang Education

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

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

Diversification Opportunities for Skillful Craftsman and Lixiang Education

0.04

Correlation Coefficient

Skillful Craftsman  Lixiang Education

Significant diversification

The 3 months correlation between Skillful and Lixiang is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Skillful Craftsman Education and Lixiang Education Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lixiang Education Holding and Skillful Craftsman 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 Skillful Craftsman Education are associated (or correlated) with Lixiang Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lixiang Education Holding has no effect on the direction of Skillful Craftsman i.e., Skillful Craftsman and Lixiang Education go up and down completely randomly.

Pair Corralation between Skillful Craftsman and Lixiang Education

Given the investment horizon of 90 days Skillful Craftsman Education is expected to generate 0.38 times more return on investment than Lixiang Education. However, Skillful Craftsman Education is 2.66 times less risky than Lixiang Education. It trades about 0.01 of its potential returns per unit of risk. Lixiang Education Holding is currently generating about -0.03 per unit of risk. If you would invest  92.00  in Skillful Craftsman Education on May 6, 2025 and sell it today you would lose (3.00) from holding Skillful Craftsman Education or give up 3.26% of portfolio value over 90 days.

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

Skillful Craftsman Education  vs.  Lixiang Education Holding

Skillful Craftsman

Risk-Adjusted Performance

Very Weak

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

Lixiang Education Holding

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Skillful Craftsman and Lixiang Education

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

The idea behind Skillful Craftsman Education and Lixiang Education Holding 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.