Correlation Between Lucid and KKRS
Can any of the company-specific risk be diversified away by investing in both Lucid and KKRS 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 KKRS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lucid Group and KKRS, you can compare the effects of market volatilities on Lucid and KKRS 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 KKRS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lucid and KKRS.
Diversification Opportunities for Lucid and KKRS
Poor diversification
The 3 months correlation between Lucid and KKRS is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Lucid Group and KKRS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KKRS 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 KKRS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KKRS has no effect on the direction of Lucid i.e., Lucid and KKRS go up and down completely randomly.
Pair Corralation between Lucid and KKRS
Given the investment horizon of 90 days Lucid Group is expected to under-perform the KKRS. In addition to that, Lucid is 4.89 times more volatile than KKRS. It trades about -0.08 of its total potential returns per unit of risk. KKRS is currently generating about -0.16 per unit of volatility. If you would invest 1,985 in KKRS on August 31, 2024 and sell it today you would lose (55.00) from holding KKRS or give up 2.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lucid Group vs. KKRS
Performance |
| Timeline |
| Lucid Group |
| KKRS |
Lucid and KKRS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lucid and KKRS
The main advantage of trading using opposite Lucid and KKRS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lucid position performs unexpectedly, KKRS 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 KKRS will offset losses from the drop in KKRS's long position.The idea behind Lucid Group and KKRS 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.| KKRS vs. United States Cellular | KKRS vs. United States Cellular | KKRS vs. Southern Company Series | KKRS vs. Affiliated Managers Group, |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |