Correlation Between Stoneridge and Lucid

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

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

Diversification Opportunities for Stoneridge and Lucid

-0.51

Correlation Coefficient

Stoneridge  Lucid

Excellent diversification

The 3 months correlation between Stoneridge and Lucid is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Stoneridge and Lucid Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucid Group and Stoneridge 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 Stoneridge 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 Stoneridge i.e., Stoneridge and Lucid go up and down completely randomly.

Pair Corralation between Stoneridge and Lucid

Considering the 90-day investment horizon Stoneridge is expected to under-perform the Lucid. But the stock apears to be less risky and, when comparing its historical volatility, Stoneridge is 1.06 times less risky than Lucid. The stock trades about -0.05 of its potential returns per unit of risk. The Lucid Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  213.00  in Lucid Group on December 1, 2024 and sell it today you would earn a total of  10.00  from holding Lucid Group or generate 4.69% return on investment over 90 days.

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

Stoneridge  vs.  Lucid Group

Stoneridge

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stoneridge has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Lucid Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lucid Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating forward indicators, Lucid exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Stoneridge and Lucid

The main advantage of trading using opposite Stoneridge and Lucid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stoneridge 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 Stoneridge 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.