Correlation Between Lexinfintech Holdings and Ready Capital
Can any of the company-specific risk be diversified away by investing in both Lexinfintech Holdings and Ready Capital 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 Ready Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lexinfintech Holdings and Ready Capital Corp, you can compare the effects of market volatilities on Lexinfintech Holdings and Ready Capital 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 Ready Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lexinfintech Holdings and Ready Capital.
Diversification Opportunities for Lexinfintech Holdings and Ready Capital
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lexinfintech and Ready is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Lexinfintech Holdings and Ready Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ready Capital 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 Ready Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ready Capital Corp has no effect on the direction of Lexinfintech Holdings i.e., Lexinfintech Holdings and Ready Capital go up and down completely randomly.
Pair Corralation between Lexinfintech Holdings and Ready Capital
Allowing for the 90-day total investment horizon Lexinfintech Holdings is expected to generate 4.54 times more return on investment than Ready Capital. However, Lexinfintech Holdings is 4.54 times more volatile than Ready Capital Corp. It trades about 0.2 of its potential returns per unit of risk. Ready Capital Corp is currently generating about 0.2 per unit of risk. If you would invest 325.00 in Lexinfintech Holdings on August 30, 2024 and sell it today you would earn a total of 102.00 from holding Lexinfintech Holdings or generate 31.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lexinfintech Holdings vs. Ready Capital Corp
Performance |
| Timeline |
| Lexinfintech Holdings |
| Ready Capital Corp |
Lexinfintech Holdings and Ready Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lexinfintech Holdings and Ready Capital
The main advantage of trading using opposite Lexinfintech Holdings and Ready Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lexinfintech Holdings position performs unexpectedly, Ready Capital 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 Ready Capital will offset losses from the drop in Ready Capital's long position.| Lexinfintech Holdings vs. 360 Finance | Lexinfintech Holdings vs. Atlanticus Holdings | Lexinfintech Holdings vs. Qudian Inc | Lexinfintech Holdings vs. Enova International |
| Ready Capital vs. Ellington Residential Mortgage | Ready Capital vs. Ellington Financial | Ready Capital vs. Ares Commercial Real | Ready Capital vs. Cherry Hill Mortgage |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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