Correlation Between Lufax Holding and Trinity Capital
Can any of the company-specific risk be diversified away by investing in both Lufax Holding and Trinity 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 Trinity 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 Trinity Capital, you can compare the effects of market volatilities on Lufax Holding and Trinity 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 Trinity Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lufax Holding and Trinity Capital.
Diversification Opportunities for Lufax Holding and Trinity Capital
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lufax and Trinity is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Lufax Holding and Trinity Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trinity Capital 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 Trinity Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trinity Capital has no effect on the direction of Lufax Holding i.e., Lufax Holding and Trinity Capital go up and down completely randomly.
Pair Corralation between Lufax Holding and Trinity Capital
Allowing for the 90-day total investment horizon Lufax Holding is expected to generate 1.78 times less return on investment than Trinity Capital. In addition to that, Lufax Holding is 6.64 times more volatile than Trinity Capital. It trades about 0.02 of its total potential returns per unit of risk. Trinity Capital is currently generating about 0.22 per unit of volatility. If you would invest 1,461 in Trinity Capital on November 2, 2024 and sell it today you would earn a total of 45.00 from holding Trinity Capital or generate 3.08% 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. Trinity Capital
Performance |
| Timeline |
| Lufax Holding |
| Trinity Capital |
Lufax Holding and Trinity Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lufax Holding and Trinity Capital
The main advantage of trading using opposite Lufax Holding and Trinity Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lufax Holding position performs unexpectedly, Trinity 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 Trinity Capital will offset losses from the drop in Trinity Capital's long position.The idea behind Lufax Holding and Trinity Capital 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.| Trinity Capital vs. Carlyle Secured Lending | Trinity Capital vs. Sixth Street Specialty | Trinity Capital vs. Hercules Capital | Trinity Capital vs. BlackRock TCP Capital |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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