Correlation Between Adient PLC and Lucid
Can any of the company-specific risk be diversified away by investing in both Adient PLC and Lucid 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 Adient PLC and Lucid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adient PLC and Lucid Group, you can compare the effects of market volatilities on Adient PLC and Lucid 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 Adient PLC with a short position of Lucid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adient PLC and Lucid.
Diversification Opportunities for Adient PLC and Lucid
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Adient and Lucid is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Adient PLC and Lucid Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucid Group and Adient PLC 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 Adient PLC are associated (or correlated) with Lucid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lucid Group has no effect on the direction of Adient PLC i.e., Adient PLC and Lucid go up and down completely randomly.
Pair Corralation between Adient PLC and Lucid
Given the investment horizon of 90 days Adient PLC is expected to generate 0.54 times more return on investment than Lucid. However, Adient PLC is 1.85 times less risky than Lucid. It trades about 0.21 of its potential returns per unit of risk. Lucid Group is currently generating about -0.13 per unit of risk. If you would invest 1,675 in Adient PLC on November 2, 2024 and sell it today you would earn a total of 140.00 from holding Adient PLC or generate 8.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adient PLC vs. Lucid Group
Performance |
| Timeline |
| Adient PLC |
| Lucid Group |
Adient PLC and Lucid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adient PLC and Lucid
The main advantage of trading using opposite Adient PLC and Lucid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adient PLC position performs unexpectedly, Lucid 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 Lucid will offset losses from the drop in Lucid's long position.| Adient PLC vs. Gentex | Adient PLC vs. Autoliv | Adient PLC vs. Fox Factory Holding | Adient PLC vs. Dana Inc |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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