Correlation Between Fisker and Lucid

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

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

Diversification Opportunities for Fisker and Lucid

0.81

Correlation Coefficient

Fisker  Lucid

Very poor diversification

The 3 months correlation between Fisker and Lucid is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Fisker Inc and Lucid Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucid Group and Fisker 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 Fisker Inc 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 Fisker i.e., Fisker and Lucid go up and down completely randomly.

Pair Corralation between Fisker and Lucid

Considering the 90-day investment horizon Fisker Inc is expected to under-perform the Lucid. In addition to that, Fisker is 1.69 times more volatile than Lucid Group. It trades about -0.14 of its total potential returns per unit of risk. Lucid Group is currently generating about -0.05 per unit of volatility. If you would invest  1,736  in Lucid Group on February 7, 2024 and sell it today you would lose (1,447) from holding Lucid Group or give up 83.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	94.94%
Values	Daily Returns

Fisker Inc  vs.  Lucid Group

Fisker Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fisker Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in June 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

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 latest unfluctuating performance, the Stock's forward indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Fisker and Lucid

The main advantage of trading using opposite Fisker and Lucid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fisker 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 Fisker Inc 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.