Correlation Between Genius Sports and Lizhi

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

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

Diversification Opportunities for Genius Sports and Lizhi

0.0

Correlation Coefficient

Genius Sports  Lizhi

Pay attention - limited upside

The 3 months correlation between Genius and Lizhi is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Genius Sports and Lizhi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lizhi Inc and Genius Sports 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 Genius Sports 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 Genius Sports i.e., Genius Sports and Lizhi go up and down completely randomly.

Pair Corralation between Genius Sports and Lizhi

If you would invest  906.00  in Genius Sports on January 6, 2025 and sell it today you would lose (28.00) from holding Genius Sports or give up 3.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Genius Sports  vs.  Lizhi Inc

Genius Sports

Risk-Adjusted Performance

Very Weak

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

Lizhi Inc

Risk-Adjusted Performance

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.

Pair Trading with Genius Sports and Lizhi

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

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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.