Correlation Between Lucid and Reddit,

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

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

Diversification Opportunities for Lucid and Reddit,

0.39

Correlation Coefficient

Lucid  Reddit,

Weak diversification

The 3 months correlation between Lucid and Reddit, is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Lucid Group and Reddit, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reddit, 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 Reddit,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reddit, has no effect on the direction of Lucid i.e., Lucid and Reddit, go up and down completely randomly.

Pair Corralation between Lucid and Reddit,

Given the investment horizon of 90 days Lucid Group is expected to under-perform the Reddit,. In addition to that, Lucid is 1.19 times more volatile than Reddit,. It trades about -0.24 of its total potential returns per unit of risk. Reddit, is currently generating about 0.07 per unit of volatility. If you would invest  17,741  in Reddit, on October 25, 2024 and sell it today you would earn a total of  633.00  from holding Reddit, or generate 3.57% return on investment over 90 days.

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

Lucid Group  vs.  Reddit,

Lucid Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lucid Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating forward indicators, Lucid exhibited solid returns over the last few months and may actually be approaching a breakup point.

Reddit,

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Reddit, are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile fundamental indicators, Reddit, unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lucid and Reddit,

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

The idea behind Lucid Group and Reddit, 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.