Correlation Between Nissan and Lucid
Can any of the company-specific risk be diversified away by investing in both Nissan and Lucid 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 Nissan and Lucid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nissan Motor Co and Lucid Group, you can compare the effects of market volatilities on Nissan and Lucid 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 Nissan with a short position of Lucid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nissan and Lucid.
Diversification Opportunities for Nissan and Lucid
Pay attention - limited upside
The 3 months correlation between Nissan and Lucid is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Nissan Motor Co and Lucid Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucid Group and Nissan 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 Nissan Motor Co are associated (or correlated) with Lucid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lucid Group has no effect on the direction of Nissan i.e., Nissan and Lucid go up and down completely randomly.
Pair Corralation between Nissan and Lucid
Assuming the 90 days horizon Nissan Motor Co is expected to generate 0.38 times more return on investment than Lucid. However, Nissan Motor Co is 2.64 times less risky than Lucid. It trades about 0.25 of its potential returns per unit of risk. Lucid Group is currently generating about -0.04 per unit of risk. If you would invest 759.00 in Nissan Motor Co on August 31, 2024 and sell it today you would earn a total of 109.00 from holding Nissan Motor Co or generate 14.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 8.29% |
| Values | Daily Returns |
Nissan Motor Co vs. Lucid Group
Performance |
| Timeline |
| Nissan Motor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Lucid Group |
Nissan and Lucid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nissan and Lucid
The main advantage of trading using opposite Nissan and Lucid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nissan position performs unexpectedly, Lucid 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 Lucid will offset losses from the drop in Lucid's long position.| Nissan vs. Honda Motor Co | Nissan vs. Toyota Motor | Nissan vs. Hyundai Motor Co | Nissan vs. Bayerische Motoren Werke |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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