Correlation Between LCI Industries and Arcimoto
Can any of the company-specific risk be diversified away by investing in both LCI Industries and Arcimoto 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 LCI Industries and Arcimoto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LCI Industries and Arcimoto, you can compare the effects of market volatilities on LCI Industries and Arcimoto 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 LCI Industries with a short position of Arcimoto. Check out your portfolio center. Please also check ongoing floating volatility patterns of LCI Industries and Arcimoto.
Diversification Opportunities for LCI Industries and Arcimoto
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between LCI and Arcimoto is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding LCI Industries and Arcimoto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcimoto and LCI Industries 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 LCI Industries are associated (or correlated) with Arcimoto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcimoto has no effect on the direction of LCI Industries i.e., LCI Industries and Arcimoto go up and down completely randomly.
Pair Corralation between LCI Industries and Arcimoto
Given the investment horizon of 90 days LCI Industries is expected to generate 0.84 times more return on investment than Arcimoto. However, LCI Industries is 1.19 times less risky than Arcimoto. It trades about -0.17 of its potential returns per unit of risk. Arcimoto is currently generating about -0.31 per unit of risk. If you would invest 11,450 in LCI Industries on January 20, 2024 and sell it today you would lose (1,031) from holding LCI Industries or give up 9.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LCI Industries vs. Arcimoto
Performance |
| Timeline |
| LCI Industries |
| Arcimoto |
LCI Industries and Arcimoto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LCI Industries and Arcimoto
The main advantage of trading using opposite LCI Industries and Arcimoto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LCI Industries position performs unexpectedly, Arcimoto 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 Arcimoto will offset losses from the drop in Arcimoto's long position.| LCI Industries vs. Microvast Holdings | LCI Industries vs. EVgo Equity Warrants | LCI Industries vs. Xos Inc | LCI Industries vs. AEye Inc |
| Arcimoto vs. Ford Motor | Arcimoto vs. General Motors | Arcimoto vs. Goodyear Tire Rubber | Arcimoto vs. Li AutoInc |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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