Correlation Between Lufax Holding and Bread Financial
Can any of the company-specific risk be diversified away by investing in both Lufax Holding and Bread Financial 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 Bread Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lufax Holding and Bread Financial Holdings, you can compare the effects of market volatilities on Lufax Holding and Bread Financial 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 Bread Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lufax Holding and Bread Financial.
Diversification Opportunities for Lufax Holding and Bread Financial
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lufax and Bread is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Lufax Holding and Bread Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bread Financial Holdings 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 Bread Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bread Financial Holdings has no effect on the direction of Lufax Holding i.e., Lufax Holding and Bread Financial go up and down completely randomly.
Pair Corralation between Lufax Holding and Bread Financial
Allowing for the 90-day total investment horizon Lufax Holding is expected to generate 1.46 times more return on investment than Bread Financial. However, Lufax Holding is 1.46 times more volatile than Bread Financial Holdings. It trades about 0.05 of its potential returns per unit of risk. Bread Financial Holdings is currently generating about 0.02 per unit of risk. If you would invest 228.00 in Lufax Holding on August 31, 2024 and sell it today you would earn a total of 23.00 from holding Lufax Holding or generate 10.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lufax Holding vs. Bread Financial Holdings
Performance |
| Timeline |
| Lufax Holding |
| Bread Financial Holdings |
Lufax Holding and Bread Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lufax Holding and Bread Financial
The main advantage of trading using opposite Lufax Holding and Bread Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lufax Holding position performs unexpectedly, Bread Financial 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 Bread Financial will offset losses from the drop in Bread Financial's long position.| Lufax Holding vs. 360 Finance | Lufax Holding vs. FinVolution Group | Lufax Holding vs. Qudian Inc | Lufax Holding vs. X Financial Class |
| Bread Financial vs. SLM Corp | Bread Financial vs. Orix Corp Ads | Bread Financial vs. FirstCash | Bread Financial vs. Medallion Financial Corp |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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