Correlation Between Lexinfintech Holdings and Invesco Trust
Can any of the company-specific risk be diversified away by investing in both Lexinfintech Holdings and Invesco Trust 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 Invesco Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lexinfintech Holdings and Invesco Trust For, you can compare the effects of market volatilities on Lexinfintech Holdings and Invesco Trust 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 Invesco Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lexinfintech Holdings and Invesco Trust.
Diversification Opportunities for Lexinfintech Holdings and Invesco Trust
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lexinfintech and Invesco is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Lexinfintech Holdings and Invesco Trust For in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Trust For 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 Invesco Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Trust For has no effect on the direction of Lexinfintech Holdings i.e., Lexinfintech Holdings and Invesco Trust go up and down completely randomly.
Pair Corralation between Lexinfintech Holdings and Invesco Trust
Allowing for the 90-day total investment horizon Lexinfintech Holdings is expected to generate 14.3 times more return on investment than Invesco Trust. However, Lexinfintech Holdings is 14.3 times more volatile than Invesco Trust For. It trades about 0.26 of its potential returns per unit of risk. Invesco Trust For is currently generating about 0.05 per unit of risk. If you would invest 167.00 in Lexinfintech Holdings on August 31, 2024 and sell it today you would earn a total of 323.00 from holding Lexinfintech Holdings or generate 193.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lexinfintech Holdings vs. Invesco Trust For
Performance |
| Timeline |
| Lexinfintech Holdings |
| Invesco Trust For |
Lexinfintech Holdings and Invesco Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lexinfintech Holdings and Invesco Trust
The main advantage of trading using opposite Lexinfintech Holdings and Invesco Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lexinfintech Holdings position performs unexpectedly, Invesco Trust 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 Invesco Trust will offset losses from the drop in Invesco Trust's long position.| Lexinfintech Holdings vs. 360 Finance | Lexinfintech Holdings vs. Atlanticus Holdings | Lexinfintech Holdings vs. Qudian Inc | Lexinfintech Holdings vs. Enova International |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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