Correlation Between Lexinfintech Holdings and GCM Grosvenor
Can any of the company-specific risk be diversified away by investing in both Lexinfintech Holdings and GCM Grosvenor 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 GCM Grosvenor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lexinfintech Holdings and GCM Grosvenor, you can compare the effects of market volatilities on Lexinfintech Holdings and GCM Grosvenor 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 GCM Grosvenor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lexinfintech Holdings and GCM Grosvenor.
Diversification Opportunities for Lexinfintech Holdings and GCM Grosvenor
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lexinfintech and GCM is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Lexinfintech Holdings and GCM Grosvenor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GCM Grosvenor 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 GCM Grosvenor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GCM Grosvenor has no effect on the direction of Lexinfintech Holdings i.e., Lexinfintech Holdings and GCM Grosvenor go up and down completely randomly.
Pair Corralation between Lexinfintech Holdings and GCM Grosvenor
Allowing for the 90-day total investment horizon Lexinfintech Holdings is expected to generate 1.09 times less return on investment than GCM Grosvenor. In addition to that, Lexinfintech Holdings is 2.62 times more volatile than GCM Grosvenor. It trades about 0.05 of its total potential returns per unit of risk. GCM Grosvenor is currently generating about 0.14 per unit of volatility. If you would invest 1,171 in GCM Grosvenor on August 28, 2024 and sell it today you would earn a total of 64.00 from holding GCM Grosvenor or generate 5.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lexinfintech Holdings vs. GCM Grosvenor
Performance |
| Timeline |
| Lexinfintech Holdings |
| GCM Grosvenor |
Lexinfintech Holdings and GCM Grosvenor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lexinfintech Holdings and GCM Grosvenor
The main advantage of trading using opposite Lexinfintech Holdings and GCM Grosvenor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lexinfintech Holdings position performs unexpectedly, GCM Grosvenor 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 GCM Grosvenor will offset losses from the drop in GCM Grosvenor's long position.| Lexinfintech Holdings vs. Orix Corp Ads | Lexinfintech Holdings vs. Medallion Financial Corp | Lexinfintech Holdings vs. Oportun Financial Corp | Lexinfintech Holdings vs. SLM Corp Pb |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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