Correlation Between DIH Holdings and Lucid
Can any of the company-specific risk be diversified away by investing in both DIH Holdings 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 DIH Holdings and Lucid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DIH Holdings US, and Lucid Group, you can compare the effects of market volatilities on DIH Holdings 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 DIH Holdings with a short position of Lucid. Check out your portfolio center. Please also check ongoing floating volatility patterns of DIH Holdings and Lucid.
Diversification Opportunities for DIH Holdings and Lucid
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DIH and Lucid is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding DIH Holdings US, and Lucid Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucid Group and DIH Holdings 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 DIH Holdings US, 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 DIH Holdings i.e., DIH Holdings and Lucid go up and down completely randomly.
Pair Corralation between DIH Holdings and Lucid
Given the investment horizon of 90 days DIH Holdings US, is expected to generate 6.42 times more return on investment than Lucid. However, DIH Holdings is 6.42 times more volatile than Lucid Group. It trades about 0.1 of its potential returns per unit of risk. Lucid Group is currently generating about -0.1 per unit of risk. If you would invest 110.00 in DIH Holdings US, on October 23, 2024 and sell it today you would earn a total of 5.00 from holding DIH Holdings US, or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DIH Holdings US, vs. Lucid Group
Performance |
| Timeline |
| DIH Holdings US, |
| Lucid Group |
DIH Holdings and Lucid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DIH Holdings and Lucid
The main advantage of trading using opposite DIH Holdings and Lucid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DIH Holdings 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.| DIH Holdings vs. HUTCHMED DRC | DIH Holdings vs. Aquestive Therapeutics | DIH Holdings vs. Yuexiu Transport Infrastructure | DIH Holdings vs. Kaiser Aluminum |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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