Correlation Between Lufax Holding and Alvarium Tiedemann
Can any of the company-specific risk be diversified away by investing in both Lufax Holding and Alvarium Tiedemann 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 Alvarium Tiedemann into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lufax Holding and Alvarium Tiedemann Holdings, you can compare the effects of market volatilities on Lufax Holding and Alvarium Tiedemann 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 Alvarium Tiedemann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lufax Holding and Alvarium Tiedemann.
Diversification Opportunities for Lufax Holding and Alvarium Tiedemann
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lufax and Alvarium is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Lufax Holding and Alvarium Tiedemann Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alvarium Tiedemann 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 Alvarium Tiedemann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alvarium Tiedemann has no effect on the direction of Lufax Holding i.e., Lufax Holding and Alvarium Tiedemann go up and down completely randomly.
Pair Corralation between Lufax Holding and Alvarium Tiedemann
Allowing for the 90-day total investment horizon Lufax Holding is expected to generate 1.06 times more return on investment than Alvarium Tiedemann. However, Lufax Holding is 1.06 times more volatile than Alvarium Tiedemann Holdings. It trades about 0.02 of its potential returns per unit of risk. Alvarium Tiedemann Holdings is currently generating about 0.02 per unit of risk. If you would invest 275.00 in Lufax Holding on August 31, 2024 and sell it today you would lose (30.00) from holding Lufax Holding or give up 10.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lufax Holding vs. Alvarium Tiedemann Holdings
Performance |
| Timeline |
| Lufax Holding |
| Alvarium Tiedemann |
Lufax Holding and Alvarium Tiedemann Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lufax Holding and Alvarium Tiedemann
The main advantage of trading using opposite Lufax Holding and Alvarium Tiedemann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lufax Holding position performs unexpectedly, Alvarium Tiedemann 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 Alvarium Tiedemann will offset losses from the drop in Alvarium Tiedemann's long position.| Lufax Holding vs. 360 Finance | Lufax Holding vs. FinVolution Group | Lufax Holding vs. Qudian Inc | Lufax Holding vs. X Financial Class |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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