Correlation Between Lufax Holding and Ares Commercial
Can any of the company-specific risk be diversified away by investing in both Lufax Holding and Ares Commercial 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 Lufax Holding and Ares Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lufax Holding and Ares Commercial Real, you can compare the effects of market volatilities on Lufax Holding and Ares Commercial 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 Lufax Holding with a short position of Ares Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lufax Holding and Ares Commercial.
Diversification Opportunities for Lufax Holding and Ares Commercial
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lufax and Ares is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Lufax Holding and Ares Commercial Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ares Commercial Real and Lufax Holding 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 Lufax Holding are associated (or correlated) with Ares Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ares Commercial Real has no effect on the direction of Lufax Holding i.e., Lufax Holding and Ares Commercial go up and down completely randomly.
Pair Corralation between Lufax Holding and Ares Commercial
Allowing for the 90-day total investment horizon Lufax Holding is expected to under-perform the Ares Commercial. In addition to that, Lufax Holding is 1.18 times more volatile than Ares Commercial Real. It trades about -0.23 of its total potential returns per unit of risk. Ares Commercial Real is currently generating about 0.23 per unit of volatility. If you would invest 646.00 in Ares Commercial Real on August 27, 2024 and sell it today you would earn a total of 83.00 from holding Ares Commercial Real or generate 12.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lufax Holding vs. Ares Commercial Real
Performance |
| Timeline |
| Lufax Holding |
| Ares Commercial Real |
Lufax Holding and Ares Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lufax Holding and Ares Commercial
The main advantage of trading using opposite Lufax Holding and Ares Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lufax Holding position performs unexpectedly, Ares Commercial 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 Ares Commercial will offset losses from the drop in Ares Commercial's long position.| Lufax Holding vs. SLM Corp | Lufax Holding vs. Orix Corp Ads | Lufax Holding vs. FirstCash | Lufax Holding vs. Medallion Financial Corp |
| Ares Commercial vs. Two Harbors Investments | Ares Commercial vs. Apollo Commercial Real | Ares Commercial vs. Ellington Financial | Ares Commercial vs. Dynex Capital |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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