Correlation Between Lucid and OFX Group
Can any of the company-specific risk be diversified away by investing in both Lucid and OFX Group 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 OFX Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lucid Group and OFX Group Ltd, you can compare the effects of market volatilities on Lucid and OFX Group 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 OFX Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lucid and OFX Group.
Diversification Opportunities for Lucid and OFX Group
Pay attention - limited upside
The 3 months correlation between Lucid and OFX is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Lucid Group and OFX Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OFX Group 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 OFX Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OFX Group has no effect on the direction of Lucid i.e., Lucid and OFX Group go up and down completely randomly.
Pair Corralation between Lucid and OFX Group
Given the investment horizon of 90 days Lucid Group is expected to under-perform the OFX Group. In addition to that, Lucid is 1.2 times more volatile than OFX Group Ltd. It trades about -0.03 of its total potential returns per unit of risk. OFX Group Ltd is currently generating about 0.06 per unit of volatility. If you would invest 440.00 in OFX Group Ltd on August 24, 2024 and sell it today you would earn a total of 293.00 from holding OFX Group Ltd or generate 66.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Lucid Group vs. OFX Group Ltd
Performance |
| Timeline |
| Lucid Group |
| OFX Group |
Lucid and OFX Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lucid and OFX Group
The main advantage of trading using opposite Lucid and OFX Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lucid position performs unexpectedly, OFX Group 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 OFX Group will offset losses from the drop in OFX Group's long position.The idea behind Lucid Group and OFX Group Ltd 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.| OFX Group vs. Copa Holdings SA | OFX Group vs. United Airlines Holdings | OFX Group vs. Delta Air Lines | OFX Group vs. SkyWest |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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