Correlation Between Lufax Holding and Nisun International
Can any of the company-specific risk be diversified away by investing in both Lufax Holding and Nisun International 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 Nisun International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lufax Holding and Nisun International Enterprise, you can compare the effects of market volatilities on Lufax Holding and Nisun International 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 Nisun International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lufax Holding and Nisun International.
Diversification Opportunities for Lufax Holding and Nisun International
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lufax and Nisun is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Lufax Holding and Nisun International Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nisun International 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 Nisun International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nisun International has no effect on the direction of Lufax Holding i.e., Lufax Holding and Nisun International go up and down completely randomly.
Pair Corralation between Lufax Holding and Nisun International
Allowing for the 90-day total investment horizon Lufax Holding is expected to generate 3.6 times less return on investment than Nisun International. But when comparing it to its historical volatility, Lufax Holding is 3.38 times less risky than Nisun International. It trades about 0.07 of its potential returns per unit of risk. Nisun International Enterprise is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 526.00 in Nisun International Enterprise on October 21, 2024 and sell it today you would earn a total of 34.00 from holding Nisun International Enterprise or generate 6.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lufax Holding vs. Nisun International Enterprise
Performance |
| Timeline |
| Lufax Holding |
| Nisun International |
Lufax Holding and Nisun International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lufax Holding and Nisun International
The main advantage of trading using opposite Lufax Holding and Nisun International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lufax Holding position performs unexpectedly, Nisun International 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 Nisun International will offset losses from the drop in Nisun International's long position.| Lufax Holding vs. 360 Finance | Lufax Holding vs. FinVolution Group | Lufax Holding vs. Qudian Inc | Lufax Holding vs. X Financial Class |
| Nisun International vs. Sentage Holdings | Nisun International vs. Yirendai | Nisun International vs. Lexinfintech Holdings | Nisun International vs. Lufax Holding |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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