Correlation Between Lucid and 126307AY3

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

Lucid  126307AY3

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. In addition to that, Lucid is 1.63 times more volatile than CSC Holdings 75. It trades about -0.19 of its total potential returns per unit of risk. CSC Holdings 75 is currently generating about 0.09 per unit of volatility. If you would invest  5,775  in CSC Holdings 75 on September 5, 2024 and sell it today you would earn a total of  620.00  from holding CSC Holdings 75 or generate 10.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	81.25%
Values	Daily Returns

Lucid Group  vs.  CSC Holdings 75

Lucid Group

Risk-Adjusted Performance

0 of 100

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 unsteady 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

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CSC Holdings 75 are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 126307AY3 sustained solid returns over the last few months and may actually be approaching a breakup point.

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.

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 CEOs Directory module to screen CEOs from public companies around the world.