Correlation Between Lufax Holding and OneMain Holdings
Can any of the company-specific risk be diversified away by investing in both Lufax Holding and OneMain 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 OneMain 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 OneMain Holdings, you can compare the effects of market volatilities on Lufax Holding and OneMain 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 OneMain Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lufax Holding and OneMain Holdings.
Diversification Opportunities for Lufax Holding and OneMain Holdings
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lufax and OneMain is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Lufax Holding and OneMain Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OneMain 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 OneMain Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OneMain Holdings has no effect on the direction of Lufax Holding i.e., Lufax Holding and OneMain Holdings go up and down completely randomly.
Pair Corralation between Lufax Holding and OneMain Holdings
Allowing for the 90-day total investment horizon Lufax Holding is expected to generate 6.0 times less return on investment than OneMain Holdings. In addition to that, Lufax Holding is 3.28 times more volatile than OneMain Holdings. It trades about 0.02 of its total potential returns per unit of risk. OneMain Holdings is currently generating about 0.37 per unit of volatility. If you would invest 5,183 in OneMain Holdings on November 2, 2024 and sell it today you would earn a total of 556.00 from holding OneMain Holdings or generate 10.73% 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. OneMain Holdings
Performance |
| Timeline |
| Lufax Holding |
| OneMain Holdings |
Lufax Holding and OneMain Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lufax Holding and OneMain Holdings
The main advantage of trading using opposite Lufax Holding and OneMain Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lufax Holding position performs unexpectedly, OneMain 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 OneMain Holdings will offset losses from the drop in OneMain Holdings' long position.The idea behind Lufax Holding and OneMain 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.| OneMain Holdings vs. Oaktree Specialty Lending | OneMain Holdings vs. Barings BDC | OneMain Holdings vs. Runway Growth Finance | OneMain Holdings vs. Ally 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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