Correlation Between Laboratory and Lucid Diagnostics

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

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

Diversification Opportunities for Laboratory and Lucid Diagnostics

0.72

Correlation Coefficient

Laboratory  Lucid Diagnostics

Poor diversification

The 3 months correlation between Laboratory and Lucid is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Laboratory of and Lucid Diagnostics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucid Diagnostics and Laboratory 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 Laboratory of are associated (or correlated) with Lucid Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lucid Diagnostics has no effect on the direction of Laboratory i.e., Laboratory and Lucid Diagnostics go up and down completely randomly.

Pair Corralation between Laboratory and Lucid Diagnostics

Allowing for the 90-day total investment horizon Laboratory is expected to generate 5.2 times less return on investment than Lucid Diagnostics. But when comparing it to its historical volatility, Laboratory of is 4.69 times less risky than Lucid Diagnostics. It trades about 0.16 of its potential returns per unit of risk. Lucid Diagnostics is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  87.00  in Lucid Diagnostics on December 5, 2024 and sell it today you would earn a total of  47.00  from holding Lucid Diagnostics or generate 54.02% return on investment over 90 days.

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

Laboratory of  vs.  Lucid Diagnostics

Laboratory

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Laboratory of are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Laboratory may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Lucid Diagnostics

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lucid Diagnostics are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent fundamental indicators, Lucid Diagnostics exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Laboratory and Lucid Diagnostics

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

The idea behind Laboratory of and Lucid Diagnostics 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.