Correlation Between Lucid and NWTN Warrant
Can any of the company-specific risk be diversified away by investing in both Lucid and NWTN Warrant 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 NWTN Warrant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lucid Group and NWTN Warrant, you can compare the effects of market volatilities on Lucid and NWTN Warrant 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 NWTN Warrant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lucid and NWTN Warrant.
Diversification Opportunities for Lucid and NWTN Warrant
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lucid and NWTN is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Lucid Group and NWTN Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NWTN Warrant 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 NWTN Warrant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NWTN Warrant has no effect on the direction of Lucid i.e., Lucid and NWTN Warrant go up and down completely randomly.
Pair Corralation between Lucid and NWTN Warrant
Given the investment horizon of 90 days Lucid Group is expected to under-perform the NWTN Warrant. But the stock apears to be less risky and, when comparing its historical volatility, Lucid Group is 6.22 times less risky than NWTN Warrant. The stock trades about -0.07 of its potential returns per unit of risk. The NWTN Warrant is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5.92 in NWTN Warrant on August 31, 2024 and sell it today you would lose (1.31) from holding NWTN Warrant or give up 22.13% 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. NWTN Warrant
Performance |
Timeline |
Lucid Group |
NWTN Warrant |
Lucid and NWTN Warrant Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lucid and NWTN Warrant
The main advantage of trading using opposite Lucid and NWTN Warrant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lucid position performs unexpectedly, NWTN Warrant 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 NWTN Warrant will offset losses from the drop in NWTN Warrant's long position.The idea behind Lucid Group and NWTN Warrant 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.NWTN Warrant vs. NWTN Class B | NWTN Warrant vs. Blade Air Mobility | NWTN Warrant vs. NewAmsterdam Pharma | NWTN Warrant vs. Alpha Tau Medical |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |