Correlation Between Lucid and Crown Proptech
Can any of the company-specific risk be diversified away by investing in both Lucid and Crown Proptech 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 Crown Proptech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lucid Group and Crown Proptech Acquisitions, you can compare the effects of market volatilities on Lucid and Crown Proptech 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 Crown Proptech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lucid and Crown Proptech.
Diversification Opportunities for Lucid and Crown Proptech
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lucid and Crown is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Lucid Group and Crown Proptech Acquisitions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown Proptech Acqui 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 Crown Proptech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown Proptech Acqui has no effect on the direction of Lucid i.e., Lucid and Crown Proptech go up and down completely randomly.
Pair Corralation between Lucid and Crown Proptech
Given the investment horizon of 90 days Lucid Group is expected to under-perform the Crown Proptech. But the stock apears to be less risky and, when comparing its historical volatility, Lucid Group is 59.26 times less risky than Crown Proptech. The stock trades about -0.03 of its potential returns per unit of risk. The Crown Proptech Acquisitions is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Crown Proptech Acquisitions on August 30, 2024 and sell it today you would earn a total of 1.10 from holding Crown Proptech Acquisitions or generate 110.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 8.89% |
| Values | Daily Returns |
Lucid Group vs. Crown Proptech Acquisitions
Performance |
| Timeline |
| Lucid Group |
| Crown Proptech Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lucid and Crown Proptech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lucid and Crown Proptech
The main advantage of trading using opposite Lucid and Crown Proptech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lucid position performs unexpectedly, Crown Proptech 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 Crown Proptech will offset losses from the drop in Crown Proptech's long position.The idea behind Lucid Group and Crown Proptech Acquisitions 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.| Crown Proptech vs. Contagious Gaming | Crown Proptech vs. LGI Homes | Crown Proptech vs. The9 Ltd ADR | Crown Proptech vs. Franklin Wireless Corp |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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