Correlation Between Lucas GC and Everspin Technologies

Can any of the company-specific risk be diversified away by investing in both Lucas GC and Everspin Technologies 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 Lucas GC and Everspin Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lucas GC Limited and Everspin Technologies, you can compare the effects of market volatilities on Lucas GC and Everspin Technologies 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 Lucas GC with a short position of Everspin Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lucas GC and Everspin Technologies.

Diversification Opportunities for Lucas GC and Everspin Technologies

-0.26

Correlation Coefficient

Lucas GC  Everspin Technologies

Very good diversification

The 3 months correlation between Lucas and Everspin is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Lucas GC Limited and Everspin Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everspin Technologies and Lucas GC 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 Lucas GC Limited are associated (or correlated) with Everspin Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everspin Technologies has no effect on the direction of Lucas GC i.e., Lucas GC and Everspin Technologies go up and down completely randomly.

Pair Corralation between Lucas GC and Everspin Technologies

Given the investment horizon of 90 days Lucas GC Limited is expected to under-perform the Everspin Technologies. In addition to that, Lucas GC is 2.57 times more volatile than Everspin Technologies. It trades about -0.1 of its total potential returns per unit of risk. Everspin Technologies is currently generating about 0.11 per unit of volatility. If you would invest  543.00  in Everspin Technologies on September 12, 2024 and sell it today you would earn a total of  104.00  from holding Everspin Technologies or generate 19.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Lucas GC Limited  vs.  Everspin Technologies

Lucas GC Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lucas GC Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Everspin Technologies

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Everspin Technologies are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Everspin Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lucas GC and Everspin Technologies

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

The idea behind Lucas GC Limited and Everspin Technologies 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.