Correlation Between Lucid and Gentex

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

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

Diversification Opportunities for Lucid and Gentex

-0.75

Correlation Coefficient

Lucid  Gentex

Pay attention - limited upside

The 3 months correlation between Lucid and Gentex is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Lucid Group and Gentex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentex 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 Gentex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentex has no effect on the direction of Lucid i.e., Lucid and Gentex go up and down completely randomly.

Pair Corralation between Lucid and Gentex

Given the investment horizon of 90 days Lucid Group is expected to under-perform the Gentex. In addition to that, Lucid is 3.83 times more volatile than Gentex. It trades about -0.02 of its total potential returns per unit of risk. Gentex is currently generating about 0.0 per unit of volatility. If you would invest  2,836  in Gentex on October 13, 2024 and sell it today you would lose (150.00) from holding Gentex or give up 5.29% of portfolio value over 90 days.

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

Lucid Group  vs.  Gentex

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 rather sound forward indicators, Lucid is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Gentex

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gentex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Lucid and Gentex

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

The idea behind Lucid Group and Gentex 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 CEOs Directory module to screen CEOs from public companies around the world.