Correlation Between OZ Minerals and Lucid

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

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

Diversification Opportunities for OZ Minerals and Lucid

0.09

Correlation Coefficient

OZ Minerals  Lucid

Significant diversification

The 3 months correlation between OZMLF and Lucid is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding OZ Minerals Limited and Lucid Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucid Group and OZ Minerals 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 OZ Minerals Limited are associated (or correlated) with Lucid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lucid Group has no effect on the direction of OZ Minerals i.e., OZ Minerals and Lucid go up and down completely randomly.

Pair Corralation between OZ Minerals and Lucid

If you would invest  210.00  in Lucid Group on September 20, 2024 and sell it today you would earn a total of  66.00  from holding Lucid Group or generate 31.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

OZ Minerals Limited  vs.  Lucid Group

OZ Minerals Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OZ Minerals Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, OZ Minerals is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

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.

Pair Trading with OZ Minerals and Lucid

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

The idea behind OZ Minerals Limited and Lucid Group 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.