Correlation Between Lucid and Kairous Acquisition
Can any of the company-specific risk be diversified away by investing in both Lucid and Kairous Acquisition 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 Kairous Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lucid Group and Kairous Acquisition Corp, you can compare the effects of market volatilities on Lucid and Kairous Acquisition 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 Kairous Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lucid and Kairous Acquisition.
Diversification Opportunities for Lucid and Kairous Acquisition
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lucid and Kairous is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Lucid Group and Kairous Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kairous Acquisition Corp 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 Kairous Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kairous Acquisition Corp has no effect on the direction of Lucid i.e., Lucid and Kairous Acquisition go up and down completely randomly.
Pair Corralation between Lucid and Kairous Acquisition
Given the investment horizon of 90 days Lucid Group is expected to under-perform the Kairous Acquisition. In addition to that, Lucid is 3.91 times more volatile than Kairous Acquisition Corp. It trades about -0.03 of its total potential returns per unit of risk. Kairous Acquisition Corp is currently generating about 0.03 per unit of volatility. If you would invest 1,025 in Kairous Acquisition Corp on August 30, 2024 and sell it today you would earn a total of 196.00 from holding Kairous Acquisition Corp or generate 19.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lucid Group vs. Kairous Acquisition Corp
Performance |
| Timeline |
| Lucid Group |
| Kairous Acquisition Corp |
Lucid and Kairous Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lucid and Kairous Acquisition
The main advantage of trading using opposite Lucid and Kairous Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lucid position performs unexpectedly, Kairous Acquisition 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 Kairous Acquisition will offset losses from the drop in Kairous Acquisition's long position.The idea behind Lucid Group and Kairous Acquisition Corp 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.| Kairous Acquisition vs. Lucid Group | Kairous Acquisition vs. Li Auto | Kairous Acquisition vs. Cars Inc | Kairous Acquisition vs. Boston Beer |
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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