Correlation Between Lucid and Global Warming
Can any of the company-specific risk be diversified away by investing in both Lucid and Global Warming 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 Global Warming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lucid Group and Global Warming Solut, you can compare the effects of market volatilities on Lucid and Global Warming 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 Global Warming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lucid and Global Warming.
Diversification Opportunities for Lucid and Global Warming
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lucid and Global is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Lucid Group and Global Warming Solut in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Warming Solut 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 Global Warming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Warming Solut has no effect on the direction of Lucid i.e., Lucid and Global Warming go up and down completely randomly.
Pair Corralation between Lucid and Global Warming
Given the investment horizon of 90 days Lucid Group is expected to generate 0.3 times more return on investment than Global Warming. However, Lucid Group is 3.33 times less risky than Global Warming. It trades about -0.16 of its potential returns per unit of risk. Global Warming Solut is currently generating about -0.13 per unit of risk. If you would invest 315.00 in Lucid Group on October 30, 2024 and sell it today you would lose (38.00) from holding Lucid Group or give up 12.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lucid Group vs. Global Warming Solut
Performance |
| Timeline |
| Lucid Group |
| Global Warming Solut |
Lucid and Global Warming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lucid and Global Warming
The main advantage of trading using opposite Lucid and Global Warming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lucid position performs unexpectedly, Global Warming 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 Global Warming will offset losses from the drop in Global Warming's long position.The idea behind Lucid Group and Global Warming Solut 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.| Global Warming vs. Genasys | Global Warming vs. Kraken Robotics | Global Warming vs. ESCO Technologies | Global Warming vs. Know Labs |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |