Correlation Between Lexinfintech Holdings and RENN Fund
Can any of the company-specific risk be diversified away by investing in both Lexinfintech Holdings and RENN Fund 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 RENN Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lexinfintech Holdings and RENN Fund, you can compare the effects of market volatilities on Lexinfintech Holdings and RENN Fund 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 RENN Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lexinfintech Holdings and RENN Fund.
Diversification Opportunities for Lexinfintech Holdings and RENN Fund
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lexinfintech and RENN is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Lexinfintech Holdings and RENN Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RENN Fund 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 RENN Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RENN Fund has no effect on the direction of Lexinfintech Holdings i.e., Lexinfintech Holdings and RENN Fund go up and down completely randomly.
Pair Corralation between Lexinfintech Holdings and RENN Fund
Allowing for the 90-day total investment horizon Lexinfintech Holdings is expected to generate 1.81 times more return on investment than RENN Fund. However, Lexinfintech Holdings is 1.81 times more volatile than RENN Fund. It trades about 0.19 of its potential returns per unit of risk. RENN Fund is currently generating about 0.15 per unit of risk. If you would invest 331.00 in Lexinfintech Holdings on August 29, 2024 and sell it today you would earn a total of 96.00 from holding Lexinfintech Holdings or generate 29.0% 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. RENN Fund
Performance |
| Timeline |
| Lexinfintech Holdings |
| RENN Fund |
Lexinfintech Holdings and RENN Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lexinfintech Holdings and RENN Fund
The main advantage of trading using opposite Lexinfintech Holdings and RENN Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lexinfintech Holdings position performs unexpectedly, RENN Fund 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 RENN Fund will offset losses from the drop in RENN Fund'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 |
| RENN Fund vs. Ellsworth Convertible Growth | RENN Fund vs. Delaware Investments Florida | RENN Fund vs. Nuveen New Jersey | RENN Fund vs. John Hancock Hedged |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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