Correlation Between Lucid and 126307AY3

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Can any of the company-specific risk be diversified away by investing in both Lucid and 126307AY3 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 126307AY3 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lucid Group and CSC Holdings 75, you can compare the effects of market volatilities on Lucid and 126307AY3 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 126307AY3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lucid and 126307AY3.

Diversification Opportunities for Lucid and 126307AY3

-0.36
  Correlation Coefficient

Very good diversification

The 3 months correlation between Lucid and 126307AY3 is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Lucid Group and CSC Holdings 75 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSC Holdings 75 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 126307AY3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSC Holdings 75 has no effect on the direction of Lucid i.e., Lucid and 126307AY3 go up and down completely randomly.

Pair Corralation between Lucid and 126307AY3

Given the investment horizon of 90 days Lucid Group is expected to under-perform the 126307AY3. But the stock apears to be less risky and, when comparing its historical volatility, Lucid Group is 10.84 times less risky than 126307AY3. The stock trades about -0.03 of its potential returns per unit of risk. The CSC Holdings 75 is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  6,465  in CSC Holdings 75 on September 11, 2024 and sell it today you would lose (640.00) from holding CSC Holdings 75 or give up 9.9% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy92.01%
ValuesDaily Returns

Lucid Group  vs.  CSC Holdings 75

 Performance 
       Timeline  
Lucid Group 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Lucid Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's forward indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
CSC Holdings 75 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in CSC Holdings 75 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 126307AY3 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Lucid and 126307AY3 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lucid and 126307AY3

The main advantage of trading using opposite Lucid and 126307AY3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lucid position performs unexpectedly, 126307AY3 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 126307AY3 will offset losses from the drop in 126307AY3's long position.
The idea behind Lucid Group and CSC Holdings 75 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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