Correlation Between Lucid Diagnostics and Clearpoint Neuro

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

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

Diversification Opportunities for Lucid Diagnostics and Clearpoint Neuro

-0.23

Correlation Coefficient

Lucid Diagnostics  Clearpoint Neuro

Very good diversification

The 3 months correlation between Lucid and Clearpoint is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Lucid Diagnostics and Clearpoint Neuro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearpoint Neuro and Lucid Diagnostics 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 Diagnostics are associated (or correlated) with Clearpoint Neuro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearpoint Neuro has no effect on the direction of Lucid Diagnostics i.e., Lucid Diagnostics and Clearpoint Neuro go up and down completely randomly.

Pair Corralation between Lucid Diagnostics and Clearpoint Neuro

Given the investment horizon of 90 days Lucid Diagnostics is expected to under-perform the Clearpoint Neuro. But the stock apears to be less risky and, when comparing its historical volatility, Lucid Diagnostics is 1.63 times less risky than Clearpoint Neuro. The stock trades about -0.27 of its potential returns per unit of risk. The Clearpoint Neuro is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest  1,074  in Clearpoint Neuro on September 17, 2024 and sell it today you would earn a total of  542.00  from holding Clearpoint Neuro or generate 50.47% return on investment over 90 days.

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

Lucid Diagnostics  vs.  Clearpoint Neuro

Lucid Diagnostics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lucid Diagnostics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Clearpoint Neuro

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Clearpoint Neuro are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Clearpoint Neuro unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lucid Diagnostics and Clearpoint Neuro

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

The idea behind Lucid Diagnostics and Clearpoint Neuro 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..