Correlation Between Lufax Holding and Lexinfintech Holdings
Can any of the company-specific risk be diversified away by investing in both Lufax Holding 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 Lufax Holding and Lexinfintech Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lufax Holding and Lexinfintech Holdings, you can compare the effects of market volatilities on Lufax Holding 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 Lufax Holding with a short position of Lexinfintech Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lufax Holding and Lexinfintech Holdings.
Diversification Opportunities for Lufax Holding and Lexinfintech Holdings
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lufax and Lexinfintech is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Lufax Holding and Lexinfintech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lexinfintech 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 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 Lufax Holding i.e., Lufax Holding and Lexinfintech Holdings go up and down completely randomly.
Pair Corralation between Lufax Holding and Lexinfintech Holdings
Allowing for the 90-day total investment horizon Lufax Holding is expected to generate 18.95 times less return on investment than Lexinfintech Holdings. In addition to that, Lufax Holding is 1.03 times more volatile than Lexinfintech Holdings. It trades about 0.02 of its total potential returns per unit of risk. Lexinfintech Holdings is currently generating about 0.37 per unit of volatility. If you would invest 577.00 in Lexinfintech Holdings on November 2, 2024 and sell it today you would earn a total of 208.00 from holding Lexinfintech Holdings or generate 36.05% 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. Lexinfintech Holdings
Performance |
| Timeline |
| Lufax Holding |
| Lexinfintech Holdings |
Lufax Holding and Lexinfintech Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lufax Holding and Lexinfintech Holdings
The main advantage of trading using opposite Lufax Holding and Lexinfintech Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lufax Holding 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.The idea behind Lufax Holding and Lexinfintech Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |