Correlation Between Lucid and Getty Images
Can any of the company-specific risk be diversified away by investing in both Lucid and Getty Images 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 Getty Images into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lucid Group and Getty Images Holdings, you can compare the effects of market volatilities on Lucid and Getty Images 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 Getty Images. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lucid and Getty Images.
Diversification Opportunities for Lucid and Getty Images
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lucid and Getty is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Lucid Group and Getty Images Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getty Images Holdings 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 Getty Images. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getty Images Holdings has no effect on the direction of Lucid i.e., Lucid and Getty Images go up and down completely randomly.
Pair Corralation between Lucid and Getty Images
Given the investment horizon of 90 days Lucid Group is expected to under-perform the Getty Images. In addition to that, Lucid is 1.14 times more volatile than Getty Images Holdings. It trades about -0.03 of its total potential returns per unit of risk. Getty Images Holdings is currently generating about 0.0 per unit of volatility. If you would invest 524.00 in Getty Images Holdings on September 5, 2024 and sell it today you would lose (229.00) from holding Getty Images Holdings or give up 43.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lucid Group vs. Getty Images Holdings
Performance |
| Timeline |
| Lucid Group |
| Getty Images Holdings |
Lucid and Getty Images Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lucid and Getty Images
The main advantage of trading using opposite Lucid and Getty Images positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lucid position performs unexpectedly, Getty Images 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 Getty Images will offset losses from the drop in Getty Images' long position.The idea behind Lucid Group and Getty Images Holdings 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.| Getty Images vs. Twilio Inc | Getty Images vs. Baidu Inc | Getty Images vs. Snap Inc | Getty Images vs. ANGI Homeservices |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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