Correlation Between Elite Education and Lucid
Can any of the company-specific risk be diversified away by investing in both Elite Education 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 Elite Education and Lucid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elite Education Group and Lucid Group, you can compare the effects of market volatilities on Elite Education 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 Elite Education with a short position of Lucid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elite Education and Lucid.
Diversification Opportunities for Elite Education and Lucid
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Elite and Lucid is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Elite Education Group and Lucid Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucid Group and Elite Education 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 Elite Education Group 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 Elite Education i.e., Elite Education and Lucid go up and down completely randomly.
Pair Corralation between Elite Education and Lucid
Given the investment horizon of 90 days Elite Education Group is expected to generate 1.64 times more return on investment than Lucid. However, Elite Education is 1.64 times more volatile than Lucid Group. It trades about 0.02 of its potential returns per unit of risk. Lucid Group is currently generating about -0.03 per unit of risk. If you would invest 175.00 in Elite Education Group on August 27, 2024 and sell it today you would lose (73.00) from holding Elite Education Group or give up 41.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.79% |
| Values | Daily Returns |
Elite Education Group vs. Lucid Group
Performance |
| Timeline |
| Elite Education Group |
| Lucid Group |
Elite Education and Lucid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elite Education and Lucid
The main advantage of trading using opposite Elite Education and Lucid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elite Education 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.| Elite Education vs. Golden Sun Education | Elite Education vs. Jianzhi Education Technology | Elite Education vs. Genius Group | Elite Education vs. Lixiang Education Holding |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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