Correlation Between Lucid and Gentera SAB
Can any of the company-specific risk be diversified away by investing in both Lucid and Gentera SAB 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 Lucid and Gentera SAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lucid Group and Gentera SAB de, you can compare the effects of market volatilities on Lucid and Gentera SAB 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 Lucid with a short position of Gentera SAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lucid and Gentera SAB.
Diversification Opportunities for Lucid and Gentera SAB
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lucid and Gentera is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Lucid Group and Gentera SAB de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentera SAB de and Lucid 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 Lucid Group are associated (or correlated) with Gentera SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentera SAB de has no effect on the direction of Lucid i.e., Lucid and Gentera SAB go up and down completely randomly.
Pair Corralation between Lucid and Gentera SAB
Given the investment horizon of 90 days Lucid Group is expected to under-perform the Gentera SAB. In addition to that, Lucid is 1.25 times more volatile than Gentera SAB de. It trades about -0.17 of its total potential returns per unit of risk. Gentera SAB de is currently generating about 0.21 per unit of volatility. If you would invest 119.00 in Gentera SAB de on August 29, 2024 and sell it today you would earn a total of 17.00 from holding Gentera SAB de or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lucid Group vs. Gentera SAB de
Performance |
| Timeline |
| Lucid Group |
| Gentera SAB de |
Lucid and Gentera SAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lucid and Gentera SAB
The main advantage of trading using opposite Lucid and Gentera SAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lucid position performs unexpectedly, Gentera SAB 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 Gentera SAB will offset losses from the drop in Gentera SAB's long position.The idea behind Lucid Group and Gentera SAB de 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.| Gentera SAB vs. Apple Inc | Gentera SAB vs. Microsoft | Gentera SAB vs. Alphabet Inc Class C | Gentera SAB vs. Meta Platforms |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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