Correlation Between Lucid and Sea
Can any of the company-specific risk be diversified away by investing in both Lucid and Sea 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 Sea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lucid Group and Sea, you can compare the effects of market volatilities on Lucid and Sea 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 Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lucid and Sea.
Diversification Opportunities for Lucid and Sea
Pay attention - limited upside
The 3 months correlation between Lucid and Sea is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Lucid Group and Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea 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 Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sea has no effect on the direction of Lucid i.e., Lucid and Sea go up and down completely randomly.
Pair Corralation between Lucid and Sea
Given the investment horizon of 90 days Lucid is expected to generate 39.5 times less return on investment than Sea. In addition to that, Lucid is 1.19 times more volatile than Sea. It trades about 0.01 of its total potential returns per unit of risk. Sea is currently generating about 0.29 per unit of volatility. If you would invest 9,538 in Sea on September 2, 2024 and sell it today you would earn a total of 1,842 from holding Sea or generate 19.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lucid Group vs. Sea
Performance |
| Timeline |
| Lucid Group |
| Sea |
Lucid and Sea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lucid and Sea
The main advantage of trading using opposite Lucid and Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lucid position performs unexpectedly, Sea 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 Sea will offset losses from the drop in Sea's long position.The idea behind Lucid Group and Sea 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.| Sea vs. Atari SA | Sea vs. Victory Square Technologies | Sea vs. Motorsport Gaming Us | Sea vs. Alpha Esports Tech |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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