Correlation Between Lucid and Zinzino AB
Can any of the company-specific risk be diversified away by investing in both Lucid and Zinzino AB 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 Zinzino AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lucid Group and Zinzino AB, you can compare the effects of market volatilities on Lucid and Zinzino AB 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 Zinzino AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lucid and Zinzino AB.
Diversification Opportunities for Lucid and Zinzino AB
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lucid and Zinzino is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Lucid Group and Zinzino AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zinzino AB 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 Zinzino AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zinzino AB has no effect on the direction of Lucid i.e., Lucid and Zinzino AB go up and down completely randomly.
Pair Corralation between Lucid and Zinzino AB
Given the investment horizon of 90 days Lucid Group is expected to generate 1.27 times more return on investment than Zinzino AB. However, Lucid is 1.27 times more volatile than Zinzino AB. It trades about 0.0 of its potential returns per unit of risk. Zinzino AB is currently generating about -0.16 per unit of risk. If you would invest 221.00 in Lucid Group on September 1, 2024 and sell it today you would lose (3.00) from holding Lucid Group or give up 1.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lucid Group vs. Zinzino AB
Performance |
| Timeline |
| Lucid Group |
| Zinzino AB |
Lucid and Zinzino AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lucid and Zinzino AB
The main advantage of trading using opposite Lucid and Zinzino AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lucid position performs unexpectedly, Zinzino AB 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 Zinzino AB will offset losses from the drop in Zinzino AB's long position.The idea behind Lucid Group and Zinzino AB 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.| Zinzino AB vs. Legacy Education | Zinzino AB vs. Apple Inc | Zinzino AB vs. NVIDIA | Zinzino AB vs. Microsoft |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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