Correlation Between Lexinfintech Holdings and Aquaron Acquisition
Can any of the company-specific risk be diversified away by investing in both Lexinfintech Holdings and Aquaron Acquisition 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 Lexinfintech Holdings and Aquaron Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lexinfintech Holdings and Aquaron Acquisition Corp, you can compare the effects of market volatilities on Lexinfintech Holdings and Aquaron Acquisition 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 Lexinfintech Holdings with a short position of Aquaron Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lexinfintech Holdings and Aquaron Acquisition.
Diversification Opportunities for Lexinfintech Holdings and Aquaron Acquisition
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lexinfintech and Aquaron is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Lexinfintech Holdings and Aquaron Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquaron Acquisition Corp and Lexinfintech Holdings 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 Lexinfintech Holdings are associated (or correlated) with Aquaron Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquaron Acquisition Corp has no effect on the direction of Lexinfintech Holdings i.e., Lexinfintech Holdings and Aquaron Acquisition go up and down completely randomly.
Pair Corralation between Lexinfintech Holdings and Aquaron Acquisition
Allowing for the 90-day total investment horizon Lexinfintech Holdings is expected to generate 3.37 times more return on investment than Aquaron Acquisition. However, Lexinfintech Holdings is 3.37 times more volatile than Aquaron Acquisition Corp. It trades about 0.32 of its potential returns per unit of risk. Aquaron Acquisition Corp is currently generating about -0.2 per unit of risk. If you would invest 589.00 in Lexinfintech Holdings on October 29, 2024 and sell it today you would earn a total of 174.00 from holding Lexinfintech Holdings or generate 29.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Lexinfintech Holdings vs. Aquaron Acquisition Corp
Performance |
| Timeline |
| Lexinfintech Holdings |
| Aquaron Acquisition Corp |
Lexinfintech Holdings and Aquaron Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lexinfintech Holdings and Aquaron Acquisition
The main advantage of trading using opposite Lexinfintech Holdings and Aquaron Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lexinfintech Holdings position performs unexpectedly, Aquaron Acquisition 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 Aquaron Acquisition will offset losses from the drop in Aquaron Acquisition's long position.| Lexinfintech Holdings vs. 360 Finance | Lexinfintech Holdings vs. Atlanticus Holdings | Lexinfintech Holdings vs. Qudian Inc | Lexinfintech Holdings vs. Enova International |
| Aquaron Acquisition vs. Bellevue Life Sciences | Aquaron Acquisition vs. Alpha One | Aquaron Acquisition vs. Manaris Corp | Aquaron Acquisition vs. A SPAC II |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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