Correlation Between Lexinfintech Holdings and Israel Acquisitions
Can any of the company-specific risk be diversified away by investing in both Lexinfintech Holdings and Israel Acquisitions 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 Israel Acquisitions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lexinfintech Holdings and Israel Acquisitions Corp, you can compare the effects of market volatilities on Lexinfintech Holdings and Israel Acquisitions 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 Israel Acquisitions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lexinfintech Holdings and Israel Acquisitions.
Diversification Opportunities for Lexinfintech Holdings and Israel Acquisitions
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lexinfintech and Israel is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Lexinfintech Holdings and Israel Acquisitions Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Acquisitions 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 Israel Acquisitions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Acquisitions Corp has no effect on the direction of Lexinfintech Holdings i.e., Lexinfintech Holdings and Israel Acquisitions go up and down completely randomly.
Pair Corralation between Lexinfintech Holdings and Israel Acquisitions
Allowing for the 90-day total investment horizon Lexinfintech Holdings is expected to generate 44.68 times more return on investment than Israel Acquisitions. However, Lexinfintech Holdings is 44.68 times more volatile than Israel Acquisitions Corp. It trades about 0.18 of its potential returns per unit of risk. Israel Acquisitions Corp is currently generating about 0.18 per unit of risk. If you would invest 173.00 in Lexinfintech Holdings on September 1, 2024 and sell it today you would earn a total of 334.00 from holding Lexinfintech Holdings or generate 193.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lexinfintech Holdings vs. Israel Acquisitions Corp
Performance |
| Timeline |
| Lexinfintech Holdings |
| Israel Acquisitions Corp |
Lexinfintech Holdings and Israel Acquisitions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lexinfintech Holdings and Israel Acquisitions
The main advantage of trading using opposite Lexinfintech Holdings and Israel Acquisitions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lexinfintech Holdings position performs unexpectedly, Israel Acquisitions 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 Israel Acquisitions will offset losses from the drop in Israel Acquisitions' long position.| Lexinfintech Holdings vs. 360 Finance | Lexinfintech Holdings vs. Atlanticus Holdings | Lexinfintech Holdings vs. Qudian Inc | Lexinfintech Holdings vs. Enova International |
| Israel Acquisitions vs. Consilium Acquisition I | Israel Acquisitions vs. A SPAC II | Israel Acquisitions vs. Athena Technology Acquisition | Israel Acquisitions vs. Pyrophyte Acquisition 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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