Correlation Between Artemis Strategic and Lucy Scientific

Can any of the company-specific risk be diversified away by investing in both Artemis Strategic and Lucy Scientific 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 Artemis Strategic and Lucy Scientific into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Artemis Strategic Investment and Lucy Scientific Discovery, you can compare the effects of market volatilities on Artemis Strategic and Lucy Scientific 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 Artemis Strategic with a short position of Lucy Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artemis Strategic and Lucy Scientific.

Diversification Opportunities for Artemis Strategic and Lucy Scientific

-0.23

Correlation Coefficient

Artemis Strategic  Lucy Scientific

Very good diversification

The 3 months correlation between Artemis and Lucy is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Artemis Strategic Investment and Lucy Scientific Discovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucy Scientific Discovery and Artemis Strategic 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 Artemis Strategic Investment are associated (or correlated) with Lucy Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lucy Scientific Discovery has no effect on the direction of Artemis Strategic i.e., Artemis Strategic and Lucy Scientific go up and down completely randomly.

Pair Corralation between Artemis Strategic and Lucy Scientific

Given the investment horizon of 90 days Artemis Strategic is expected to generate 262.24 times less return on investment than Lucy Scientific. But when comparing it to its historical volatility, Artemis Strategic Investment is 611.04 times less risky than Lucy Scientific. It trades about 0.2 of its potential returns per unit of risk. Lucy Scientific Discovery is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  2,990  in Lucy Scientific Discovery on July 20, 2024 and sell it today you would lose (2,988) from holding Lucy Scientific Discovery or give up 99.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	46.56%
Values	Daily Returns

Artemis Strategic Investment  vs.  Lucy Scientific Discovery

Artemis Strategic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Artemis Strategic Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Artemis Strategic is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Lucy Scientific Discovery

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Lucy Scientific Discovery has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly inconsistent fundamental indicators, Lucy Scientific demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Artemis Strategic and Lucy Scientific

The main advantage of trading using opposite Artemis Strategic and Lucy Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artemis Strategic position performs unexpectedly, Lucy Scientific 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 Lucy Scientific will offset losses from the drop in Lucy Scientific's long position.

The idea behind Artemis Strategic Investment and Lucy Scientific Discovery 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.

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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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.