Correlation Between Lufax Holding and Rithm Capital
Can any of the company-specific risk be diversified away by investing in both Lufax Holding and Rithm Capital 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 Rithm Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lufax Holding and Rithm Capital Corp, you can compare the effects of market volatilities on Lufax Holding and Rithm Capital 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 Rithm Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lufax Holding and Rithm Capital.
Diversification Opportunities for Lufax Holding and Rithm Capital
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lufax and Rithm is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Lufax Holding and Rithm Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rithm Capital 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 Rithm Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rithm Capital Corp has no effect on the direction of Lufax Holding i.e., Lufax Holding and Rithm Capital go up and down completely randomly.
Pair Corralation between Lufax Holding and Rithm Capital
Allowing for the 90-day total investment horizon Lufax Holding is expected to generate 1.72 times less return on investment than Rithm Capital. In addition to that, Lufax Holding is 3.75 times more volatile than Rithm Capital Corp. It trades about 0.01 of its total potential returns per unit of risk. Rithm Capital Corp is currently generating about 0.07 per unit of volatility. If you would invest 721.00 in Rithm Capital Corp on August 27, 2024 and sell it today you would earn a total of 377.00 from holding Rithm Capital Corp or generate 52.29% 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. Rithm Capital Corp
Performance |
| Timeline |
| Lufax Holding |
| Rithm Capital Corp |
Lufax Holding and Rithm Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lufax Holding and Rithm Capital
The main advantage of trading using opposite Lufax Holding and Rithm Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lufax Holding position performs unexpectedly, Rithm Capital 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 Rithm Capital will offset losses from the drop in Rithm Capital's long position.| Lufax Holding vs. SLM Corp | Lufax Holding vs. Orix Corp Ads | Lufax Holding vs. FirstCash | Lufax Holding vs. Medallion Financial Corp |
| Rithm Capital vs. Starwood Property Trust | Rithm Capital vs. AGNC Investment Corp | Rithm Capital vs. Blackstone Mortgage Trust | Rithm Capital vs. Ares Commercial Real |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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