Correlation Between Lufax Holding and Yirendai
Can any of the company-specific risk be diversified away by investing in both Lufax Holding and Yirendai 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 Yirendai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lufax Holding and Yirendai, you can compare the effects of market volatilities on Lufax Holding and Yirendai 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 Yirendai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lufax Holding and Yirendai.
Diversification Opportunities for Lufax Holding and Yirendai
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lufax and Yirendai is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Lufax Holding and Yirendai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yirendai 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 Yirendai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yirendai has no effect on the direction of Lufax Holding i.e., Lufax Holding and Yirendai go up and down completely randomly.
Pair Corralation between Lufax Holding and Yirendai
Allowing for the 90-day total investment horizon Lufax Holding is expected to generate 0.6 times more return on investment than Yirendai. However, Lufax Holding is 1.67 times less risky than Yirendai. It trades about -0.23 of its potential returns per unit of risk. Yirendai is currently generating about -0.19 per unit of risk. If you would invest 274.00 in Lufax Holding on August 28, 2024 and sell it today you would lose (41.00) from holding Lufax Holding or give up 14.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lufax Holding vs. Yirendai
Performance |
| Timeline |
| Lufax Holding |
| Yirendai |
Lufax Holding and Yirendai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lufax Holding and Yirendai
The main advantage of trading using opposite Lufax Holding and Yirendai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lufax Holding position performs unexpectedly, Yirendai 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 Yirendai will offset losses from the drop in Yirendai's long position.| Lufax Holding vs. SLM Corp | Lufax Holding vs. Orix Corp Ads | Lufax Holding vs. FirstCash | Lufax Holding vs. Medallion Financial Corp |
| Yirendai vs. Lexinfintech Holdings | Yirendai vs. FinVolution Group | Yirendai vs. 360 Finance | Yirendai vs. Navient Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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