Correlation Between Li Auto and Ralph Lauren
Can any of the company-specific risk be diversified away by investing in both Li Auto and Ralph Lauren 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 Li Auto and Ralph Lauren into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Li Auto and Ralph Lauren Corp, you can compare the effects of market volatilities on Li Auto and Ralph Lauren 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 Li Auto with a short position of Ralph Lauren. Check out your portfolio center. Please also check ongoing floating volatility patterns of Li Auto and Ralph Lauren.
Diversification Opportunities for Li Auto and Ralph Lauren
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Li Auto and Ralph is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Li Auto and Ralph Lauren Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ralph Lauren Corp and Li Auto 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 Li Auto are associated (or correlated) with Ralph Lauren. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ralph Lauren Corp has no effect on the direction of Li Auto i.e., Li Auto and Ralph Lauren go up and down completely randomly.
Pair Corralation between Li Auto and Ralph Lauren
Allowing for the 90-day total investment horizon Li Auto is expected to under-perform the Ralph Lauren. In addition to that, Li Auto is 1.09 times more volatile than Ralph Lauren Corp. It trades about -0.26 of its total potential returns per unit of risk. Ralph Lauren Corp is currently generating about 0.09 per unit of volatility. If you would invest 33,413 in Ralph Lauren Corp on October 21, 2025 and sell it today you would earn a total of 2,892 from holding Ralph Lauren Corp or generate 8.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Li Auto vs. Ralph Lauren Corp
Performance |
| Timeline |
| Li Auto |
| Ralph Lauren Corp |
Li Auto and Ralph Lauren Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Li Auto and Ralph Lauren
The main advantage of trading using opposite Li Auto and Ralph Lauren positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Li Auto position performs unexpectedly, Ralph Lauren 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 Ralph Lauren will offset losses from the drop in Ralph Lauren's long position.| Li Auto vs. Geely Automobile Holdings | Li Auto vs. Xpeng Inc | Li Auto vs. Darden Restaurants | Li Auto vs. NVR Inc |
| Ralph Lauren vs. InterContinental Hotels Group | Ralph Lauren vs. Smurfit WestRock plc | Ralph Lauren vs. Lululemon Athletica | Ralph Lauren vs. Caseys General Stores |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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