Correlation Between Lufax Holding and TPG RE
Can any of the company-specific risk be diversified away by investing in both Lufax Holding and TPG RE 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 TPG RE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lufax Holding and TPG RE Finance, you can compare the effects of market volatilities on Lufax Holding and TPG RE 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 TPG RE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lufax Holding and TPG RE.
Diversification Opportunities for Lufax Holding and TPG RE
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lufax and TPG is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Lufax Holding and TPG RE Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPG RE Finance 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 TPG RE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPG RE Finance has no effect on the direction of Lufax Holding i.e., Lufax Holding and TPG RE go up and down completely randomly.
Pair Corralation between Lufax Holding and TPG RE
Allowing for the 90-day total investment horizon Lufax Holding is expected to under-perform the TPG RE. In addition to that, Lufax Holding is 1.94 times more volatile than TPG RE Finance. It trades about -0.23 of its total potential returns per unit of risk. TPG RE Finance is currently generating about 0.23 per unit of volatility. If you would invest 838.00 in TPG RE Finance on August 28, 2024 and sell it today you would earn a total of 65.00 from holding TPG RE Finance or generate 7.76% 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. TPG RE Finance
Performance |
| Timeline |
| Lufax Holding |
| TPG RE Finance |
Lufax Holding and TPG RE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lufax Holding and TPG RE
The main advantage of trading using opposite Lufax Holding and TPG RE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lufax Holding position performs unexpectedly, TPG RE 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 TPG RE will offset losses from the drop in TPG RE's long position.| Lufax Holding vs. SLM Corp | Lufax Holding vs. Orix Corp Ads | Lufax Holding vs. FirstCash | Lufax Holding vs. Medallion Financial Corp |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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