Correlation Between Federal Agricultural and Lufax Holding
Can any of the company-specific risk be diversified away by investing in both Federal Agricultural and Lufax Holding 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 Federal Agricultural and Lufax Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federal Agricultural Mortgage and Lufax Holding, you can compare the effects of market volatilities on Federal Agricultural and Lufax Holding 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 Federal Agricultural with a short position of Lufax Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Agricultural and Lufax Holding.
Diversification Opportunities for Federal Agricultural and Lufax Holding
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Federal and Lufax is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Federal Agricultural Mortgage and Lufax Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lufax Holding and Federal Agricultural 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 Federal Agricultural Mortgage are associated (or correlated) with Lufax Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lufax Holding has no effect on the direction of Federal Agricultural i.e., Federal Agricultural and Lufax Holding go up and down completely randomly.
Pair Corralation between Federal Agricultural and Lufax Holding
Considering the 90-day investment horizon Federal Agricultural Mortgage is expected to generate 0.92 times more return on investment than Lufax Holding. However, Federal Agricultural Mortgage is 1.09 times less risky than Lufax Holding. It trades about 0.15 of its potential returns per unit of risk. Lufax Holding is currently generating about -0.26 per unit of risk. If you would invest 18,530 in Federal Agricultural Mortgage on August 24, 2024 and sell it today you would earn a total of 1,647 from holding Federal Agricultural Mortgage or generate 8.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federal Agricultural Mortgage vs. Lufax Holding
Performance |
| Timeline |
| Federal Agricultural |
| Lufax Holding |
Federal Agricultural and Lufax Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Agricultural and Lufax Holding
The main advantage of trading using opposite Federal Agricultural and Lufax Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Agricultural position performs unexpectedly, Lufax Holding 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 Lufax Holding will offset losses from the drop in Lufax Holding's long position.| Federal Agricultural vs. Visa Class A | Federal Agricultural vs. Mastercard | Federal Agricultural vs. SoFi Technologies | Federal Agricultural vs. Coca Cola Consolidated |
| Lufax Holding vs. 360 Finance | Lufax Holding vs. FinVolution Group | Lufax Holding vs. Qudian Inc | Lufax Holding vs. X Financial 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 CEOs Directory module to screen CEOs from public companies around the world.
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