Correlation Between Lucid and Thor Industries

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

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

Diversification Opportunities for Lucid and Thor Industries

-0.52

Correlation Coefficient

Lucid  Thor Industries

Excellent diversification

The 3 months correlation between Lucid and Thor is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Lucid Group and Thor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Industries 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 Thor Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thor Industries has no effect on the direction of Lucid i.e., Lucid and Thor Industries go up and down completely randomly.

Pair Corralation between Lucid and Thor Industries

Given the investment horizon of 90 days Lucid Group is expected to under-perform the Thor Industries. In addition to that, Lucid is 1.84 times more volatile than Thor Industries. It trades about -0.19 of its total potential returns per unit of risk. Thor Industries is currently generating about 0.06 per unit of volatility. If you would invest  10,470  in Thor Industries on September 2, 2024 and sell it today you would earn a total of  690.00  from holding Thor Industries or generate 6.59% return on investment over 90 days.

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

Lucid Group  vs.  Thor Industries

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 unfluctuating performance in the last few months, the Stock's forward indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Thor Industries

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Thor Industries are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical indicators, Thor Industries may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Lucid and Thor Industries

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

The idea behind Lucid Group and Thor Industries 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 Commodity Directory module to find actively traded commodities issued by global exchanges.