Correlation Between Koninklijke Philips and Lucid Diagnostics
Can any of the company-specific risk be diversified away by investing in both Koninklijke Philips and Lucid Diagnostics 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 Koninklijke Philips and Lucid Diagnostics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koninklijke Philips NV and Lucid Diagnostics, you can compare the effects of market volatilities on Koninklijke Philips and Lucid Diagnostics 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 Koninklijke Philips with a short position of Lucid Diagnostics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koninklijke Philips and Lucid Diagnostics.
Diversification Opportunities for Koninklijke Philips and Lucid Diagnostics
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Koninklijke and Lucid is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Koninklijke Philips NV and Lucid Diagnostics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucid Diagnostics and Koninklijke Philips 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 Koninklijke Philips NV are associated (or correlated) with Lucid Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lucid Diagnostics has no effect on the direction of Koninklijke Philips i.e., Koninklijke Philips and Lucid Diagnostics go up and down completely randomly.
Pair Corralation between Koninklijke Philips and Lucid Diagnostics
Considering the 90-day investment horizon Koninklijke Philips NV is expected to generate 0.64 times more return on investment than Lucid Diagnostics. However, Koninklijke Philips NV is 1.57 times less risky than Lucid Diagnostics. It trades about 0.07 of its potential returns per unit of risk. Lucid Diagnostics is currently generating about -0.02 per unit of risk. If you would invest 1,383 in Koninklijke Philips NV on August 24, 2024 and sell it today you would earn a total of 1,256 from holding Koninklijke Philips NV or generate 90.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koninklijke Philips NV vs. Lucid Diagnostics
Performance |
| Timeline |
| Koninklijke Philips |
| Lucid Diagnostics |
Koninklijke Philips and Lucid Diagnostics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koninklijke Philips and Lucid Diagnostics
The main advantage of trading using opposite Koninklijke Philips and Lucid Diagnostics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koninklijke Philips position performs unexpectedly, Lucid Diagnostics 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 Diagnostics will offset losses from the drop in Lucid Diagnostics' long position.| Koninklijke Philips vs. ZimVie Inc | Koninklijke Philips vs. Stryker | Koninklijke Philips vs. Boston Scientific Corp | Koninklijke Philips vs. STERIS plc |
| Lucid Diagnostics vs. Inari Medical | Lucid Diagnostics vs. Beyond Air | Lucid Diagnostics vs. Clearpoint Neuro | Lucid Diagnostics vs. LivaNova PLC |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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