Correlation Between Lufax Holding and Mars Acquisition
Can any of the company-specific risk be diversified away by investing in both Lufax Holding and Mars Acquisition 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 Mars Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lufax Holding and Mars Acquisition Corp, you can compare the effects of market volatilities on Lufax Holding and Mars Acquisition 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 Mars Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lufax Holding and Mars Acquisition.
Diversification Opportunities for Lufax Holding and Mars Acquisition
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lufax and Mars is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Lufax Holding and Mars Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mars Acquisition Corp 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 Mars Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mars Acquisition Corp has no effect on the direction of Lufax Holding i.e., Lufax Holding and Mars Acquisition go up and down completely randomly.
Pair Corralation between Lufax Holding and Mars Acquisition
Allowing for the 90-day total investment horizon Lufax Holding is expected to generate 4.74 times less return on investment than Mars Acquisition. But when comparing it to its historical volatility, Lufax Holding is 1.91 times less risky than Mars Acquisition. It trades about 0.03 of its potential returns per unit of risk. Mars Acquisition Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 21.00 in Mars Acquisition Corp on September 12, 2024 and sell it today you would earn a total of 15.00 from holding Mars Acquisition Corp or generate 71.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 46.53% |
| Values | Daily Returns |
Lufax Holding vs. Mars Acquisition Corp
Performance |
| Timeline |
| Lufax Holding |
| Mars Acquisition Corp |
Lufax Holding and Mars Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lufax Holding and Mars Acquisition
The main advantage of trading using opposite Lufax Holding and Mars Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lufax Holding position performs unexpectedly, Mars Acquisition 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 Mars Acquisition will offset losses from the drop in Mars Acquisition's long position.| Lufax Holding vs. Victory Integrity Smallmid Cap | Lufax Holding vs. Hilton Worldwide Holdings | Lufax Holding vs. NVIDIA | Lufax Holding vs. JPMorgan Chase Co |
| Mars Acquisition vs. HUMANA INC | Mars Acquisition vs. Barloworld Ltd ADR | Mars Acquisition vs. Morningstar Unconstrained Allocation | Mars Acquisition vs. Thrivent High Yield |
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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