Correlation Between Tesla and Lucid
Can any of the company-specific risk be diversified away by investing in both Tesla 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 Tesla and Lucid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tesla Inc and Lucid Group, you can compare the effects of market volatilities on Tesla 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 Tesla with a short position of Lucid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesla and Lucid.
Diversification Opportunities for Tesla and Lucid
Modest diversification
The 3 months correlation between Tesla and Lucid is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and Lucid Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucid Group and Tesla 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 Tesla 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 Tesla i.e., Tesla and Lucid go up and down completely randomly.
Pair Corralation between Tesla and Lucid
Given the investment horizon of 90 days Tesla Inc is expected to generate 0.6 times more return on investment than Lucid. However, Tesla Inc is 1.68 times less risky than Lucid. It trades about 0.06 of its potential returns per unit of risk. Lucid Group is currently generating about 0.02 per unit of risk. If you would invest 28,721 in Tesla Inc on May 2, 2025 and sell it today you would earn a total of 3,122 from holding Tesla Inc or generate 10.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tesla Inc vs. Lucid Group
Performance |
| Timeline |
| Tesla Inc |
| Lucid Group |
Tesla and Lucid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tesla and Lucid
The main advantage of trading using opposite Tesla and Lucid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla 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 Tesla 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.| Lucid vs. Xpeng Inc | Lucid vs. Tesla Inc | Lucid vs. Rivian Automotive | Lucid vs. Palantir Technologies Class |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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