Correlation Between Lufax Holding and Upstart Holdings
Can any of the company-specific risk be diversified away by investing in both Lufax Holding and Upstart 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 Upstart 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 Upstart Holdings, you can compare the effects of market volatilities on Lufax Holding and Upstart 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 Upstart Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lufax Holding and Upstart Holdings.
Diversification Opportunities for Lufax Holding and Upstart Holdings
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lufax and Upstart is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Lufax Holding and Upstart Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Upstart 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 Upstart Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Upstart Holdings has no effect on the direction of Lufax Holding i.e., Lufax Holding and Upstart Holdings go up and down completely randomly.
Pair Corralation between Lufax Holding and Upstart Holdings
Allowing for the 90-day total investment horizon Lufax Holding is expected to under-perform the Upstart Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Lufax Holding is 1.64 times less risky than Upstart Holdings. The stock trades about -0.15 of its potential returns per unit of risk. The Upstart Holdings is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,894 in Upstart Holdings on November 1, 2024 and sell it today you would earn a total of 2,713 from holding Upstart Holdings or generate 69.67% 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. Upstart Holdings
Performance |
| Timeline |
| Lufax Holding |
| Upstart Holdings |
Lufax Holding and Upstart Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lufax Holding and Upstart Holdings
The main advantage of trading using opposite Lufax Holding and Upstart Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lufax Holding position performs unexpectedly, Upstart 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 Upstart Holdings will offset losses from the drop in Upstart Holdings' long position.The idea behind Lufax Holding and Upstart 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.| Upstart Holdings vs. SoFi Technologies | Upstart Holdings vs. Visa Class A | Upstart Holdings vs. Mastercard | Upstart Holdings vs. American Express |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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