Correlation Between Lucid Diagnostics and Avita Medical
Can any of the company-specific risk be diversified away by investing in both Lucid Diagnostics and Avita Medical 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 Avita Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lucid Diagnostics and Avita Medical, you can compare the effects of market volatilities on Lucid Diagnostics and Avita Medical 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 Avita Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lucid Diagnostics and Avita Medical.
Diversification Opportunities for Lucid Diagnostics and Avita Medical
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lucid and Avita is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Lucid Diagnostics and Avita Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avita Medical 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 Avita Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avita Medical has no effect on the direction of Lucid Diagnostics i.e., Lucid Diagnostics and Avita Medical go up and down completely randomly.
Pair Corralation between Lucid Diagnostics and Avita Medical
Given the investment horizon of 90 days Lucid Diagnostics is expected to generate 1.19 times more return on investment than Avita Medical. However, Lucid Diagnostics is 1.19 times more volatile than Avita Medical. It trades about 0.33 of its potential returns per unit of risk. Avita Medical is currently generating about 0.0 per unit of risk. If you would invest 91.00 in Lucid Diagnostics on December 5, 2024 and sell it today you would earn a total of 46.50 from holding Lucid Diagnostics or generate 51.1% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Lucid Diagnostics vs. Avita Medical
Performance |
Timeline |
Lucid Diagnostics |
Avita Medical |
Lucid Diagnostics and Avita Medical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lucid Diagnostics and Avita Medical
The main advantage of trading using opposite Lucid Diagnostics and Avita Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lucid Diagnostics position performs unexpectedly, Avita Medical 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 Avita Medical will offset losses from the drop in Avita Medical's long position.Lucid Diagnostics vs. Beyond Air | Lucid Diagnostics vs. PAVmed Series Z | Lucid Diagnostics vs. Clearpoint Neuro | Lucid Diagnostics vs. LivaNova PLC |
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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 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.
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