Correlation Between Lucid and Xpeng
Can any of the company-specific risk be diversified away by investing in both Lucid and Xpeng 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 Xpeng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lucid Group and Xpeng Inc, you can compare the effects of market volatilities on Lucid and Xpeng 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 Xpeng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lucid and Xpeng.
Diversification Opportunities for Lucid and Xpeng
Pay attention - limited upside
The 3 months correlation between Lucid and Xpeng is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Lucid Group and Xpeng Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xpeng Inc 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 Xpeng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xpeng Inc has no effect on the direction of Lucid i.e., Lucid and Xpeng go up and down completely randomly.
Pair Corralation between Lucid and Xpeng
Given the investment horizon of 90 days Lucid Group is expected to under-perform the Xpeng. In addition to that, Lucid is 1.05 times more volatile than Xpeng Inc. It trades about -0.03 of its total potential returns per unit of risk. Xpeng Inc is currently generating about 0.02 per unit of volatility. If you would invest 1,169 in Xpeng Inc on August 27, 2024 and sell it today you would earn a total of 22.00 from holding Xpeng Inc or generate 1.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lucid Group vs. Xpeng Inc
Performance |
| Timeline |
| Lucid Group |
| Xpeng Inc |
Lucid and Xpeng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lucid and Xpeng
The main advantage of trading using opposite Lucid and Xpeng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lucid position performs unexpectedly, Xpeng 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 Xpeng will offset losses from the drop in Xpeng's long position.The idea behind Lucid Group and Xpeng Inc 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.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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |