Correlation Between Critical Metals and Lucid

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

By analyzing existing cross correlation between Critical Metals Corp and Lucid Group, you can compare the effects of market volatilities on Critical Metals and Lucid 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 Critical Metals with a short position of Lucid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Critical Metals and Lucid.

Diversification Opportunities for Critical Metals and Lucid

0.57

Correlation Coefficient

Critical Metals  Lucid

Very weak diversification

The 3 months correlation between Critical and Lucid is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Critical Metals Corp and Lucid Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucid Group and Critical Metals 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 Critical Metals Corp are associated (or correlated) with Lucid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lucid Group has no effect on the direction of Critical Metals i.e., Critical Metals and Lucid go up and down completely randomly.

Pair Corralation between Critical Metals and Lucid

Given the investment horizon of 90 days Critical Metals Corp is expected to under-perform the Lucid. In addition to that, Critical Metals is 2.3 times more volatile than Lucid Group. It trades about -0.16 of its total potential returns per unit of risk. Lucid Group is currently generating about -0.09 per unit of volatility. If you would invest  310.00  in Lucid Group on December 21, 2024 and sell it today you would lose (82.00) from holding Lucid Group or give up 26.45% of portfolio value over 90 days.

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

Critical Metals Corp  vs.  Lucid Group

Critical Metals Corp

Risk-Adjusted Performance

Very Weak

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

Lucid Group

Risk-Adjusted Performance

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 April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Critical Metals and Lucid

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

The idea behind Critical Metals Corp and Lucid Group 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.