Correlation Between Lufax Holding and Western Asset
Can any of the company-specific risk be diversified away by investing in both Lufax Holding and Western Asset 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 Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lufax Holding and Western Asset Diversified, you can compare the effects of market volatilities on Lufax Holding and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lufax Holding and Western Asset.
Diversification Opportunities for Lufax Holding and Western Asset
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lufax and Western is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Lufax Holding and Western Asset Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Diversified 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Diversified has no effect on the direction of Lufax Holding i.e., Lufax Holding and Western Asset go up and down completely randomly.
Pair Corralation between Lufax Holding and Western Asset
Allowing for the 90-day total investment horizon Lufax Holding is expected to under-perform the Western Asset. In addition to that, Lufax Holding is 3.99 times more volatile than Western Asset Diversified. It trades about -0.26 of its total potential returns per unit of risk. Western Asset Diversified is currently generating about -0.11 per unit of volatility. If you would invest 1,498 in Western Asset Diversified on August 24, 2024 and sell it today you would lose (29.00) from holding Western Asset Diversified or give up 1.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lufax Holding vs. Western Asset Diversified
Performance |
| Timeline |
| Lufax Holding |
| Western Asset Diversified |
Lufax Holding and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lufax Holding and Western Asset
The main advantage of trading using opposite Lufax Holding and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lufax Holding position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Lufax Holding vs. 360 Finance | Lufax Holding vs. FinVolution Group | Lufax Holding vs. Qudian Inc | Lufax Holding vs. X Financial Class |
| Western Asset vs. Neuberger Berman Next | Western Asset vs. Doubleline Yield Opportunities | Western Asset vs. PIMCO Access Income | Western Asset vs. Blackrock Innovation Growth |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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