Correlation Between Cosmos Group and Lexinfintech Holdings
Can any of the company-specific risk be diversified away by investing in both Cosmos Group and Lexinfintech Holdings 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 Cosmos Group and Lexinfintech Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cosmos Group Holdings and Lexinfintech Holdings, you can compare the effects of market volatilities on Cosmos Group and Lexinfintech Holdings 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 Cosmos Group with a short position of Lexinfintech Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cosmos Group and Lexinfintech Holdings.
Diversification Opportunities for Cosmos Group and Lexinfintech Holdings
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cosmos and Lexinfintech is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Cosmos Group Holdings and Lexinfintech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lexinfintech Holdings and Cosmos Group 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 Cosmos Group Holdings are associated (or correlated) with Lexinfintech Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lexinfintech Holdings has no effect on the direction of Cosmos Group i.e., Cosmos Group and Lexinfintech Holdings go up and down completely randomly.
Pair Corralation between Cosmos Group and Lexinfintech Holdings
Given the investment horizon of 90 days Cosmos Group Holdings is expected to generate 46.69 times more return on investment than Lexinfintech Holdings. However, Cosmos Group is 46.69 times more volatile than Lexinfintech Holdings. It trades about 0.18 of its potential returns per unit of risk. Lexinfintech Holdings is currently generating about 0.36 per unit of risk. If you would invest 0.01 in Cosmos Group Holdings on November 8, 2024 and sell it today you would earn a total of 0.00 from holding Cosmos Group Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Cosmos Group Holdings vs. Lexinfintech Holdings
Performance |
| Timeline |
| Cosmos Group Holdings |
| Lexinfintech Holdings |
Cosmos Group and Lexinfintech Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cosmos Group and Lexinfintech Holdings
The main advantage of trading using opposite Cosmos Group and Lexinfintech Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosmos Group position performs unexpectedly, Lexinfintech Holdings 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 Lexinfintech Holdings will offset losses from the drop in Lexinfintech Holdings' long position.| Cosmos Group vs. Zip Co Limited | Cosmos Group vs. Regional Management Corp | Cosmos Group vs. Enova International | Cosmos Group vs. Open Lending Corp |
| Lexinfintech Holdings vs. 360 Finance | Lexinfintech Holdings vs. Atlanticus Holdings | Lexinfintech Holdings vs. Qudian Inc | Lexinfintech Holdings vs. Enova International |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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