Correlation Between Lufax Holding and Iris Energy
Can any of the company-specific risk be diversified away by investing in both Lufax Holding and Iris Energy 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 Iris Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lufax Holding and Iris Energy, you can compare the effects of market volatilities on Lufax Holding and Iris Energy 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 Iris Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lufax Holding and Iris Energy.
Diversification Opportunities for Lufax Holding and Iris Energy
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lufax and Iris is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Lufax Holding and Iris Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iris Energy 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 Iris Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iris Energy has no effect on the direction of Lufax Holding i.e., Lufax Holding and Iris Energy go up and down completely randomly.
Pair Corralation between Lufax Holding and Iris Energy
Allowing for the 90-day total investment horizon Lufax Holding is expected to generate 2.37 times less return on investment than Iris Energy. But when comparing it to its historical volatility, Lufax Holding is 1.89 times less risky than Iris Energy. It trades about 0.06 of its potential returns per unit of risk. Iris Energy is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,041 in Iris Energy on September 24, 2024 and sell it today you would earn a total of 84.00 from holding Iris Energy or generate 8.07% 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. Iris Energy
Performance |
| Timeline |
| Lufax Holding |
| Iris Energy |
Lufax Holding and Iris Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lufax Holding and Iris Energy
The main advantage of trading using opposite Lufax Holding and Iris Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lufax Holding position performs unexpectedly, Iris Energy 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 Iris Energy will offset losses from the drop in Iris Energy's long position.| Lufax Holding vs. Visa Class A | Lufax Holding vs. Mastercard | Lufax Holding vs. Discover Financial Services |
| Iris Energy vs. NETGEAR | Iris Energy vs. Evertz Technologies Limited | Iris Energy vs. Valneva SE ADR | Iris Energy vs. Ameriprise Financial |
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 Stocks Directory module to find actively traded stocks across global markets.
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