Correlation Between Lucid and Cenntro Electric

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

By analyzing existing cross correlation between Lucid Group and Cenntro Electric Group, you can compare the effects of market volatilities on Lucid and Cenntro Electric 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 Cenntro Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lucid and Cenntro Electric.

Diversification Opportunities for Lucid and Cenntro Electric

0.54

Correlation Coefficient

Lucid  Cenntro Electric

Very weak diversification

The 3 months correlation between Lucid and Cenntro is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Lucid Group and Cenntro Electric Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cenntro Electric 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 Cenntro Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cenntro Electric has no effect on the direction of Lucid i.e., Lucid and Cenntro Electric go up and down completely randomly.

Pair Corralation between Lucid and Cenntro Electric

Given the investment horizon of 90 days Lucid Group is expected to under-perform the Cenntro Electric. But the stock apears to be less risky and, when comparing its historical volatility, Lucid Group is 1.33 times less risky than Cenntro Electric. The stock trades about -0.07 of its potential returns per unit of risk. The Cenntro Electric Group is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  108.00  in Cenntro Electric Group on December 28, 2024 and sell it today you would lose (17.00) from holding Cenntro Electric Group or give up 15.74% of portfolio value over 90 days.

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

Lucid Group  vs.  Cenntro Electric Group

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 abnormal 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.

Cenntro Electric

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cenntro Electric Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Lucid and Cenntro Electric

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

The idea behind Lucid Group and Cenntro Electric 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.