Correlation Between Mastercard and Lufax Holding

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Mastercard and Lufax Holding 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 Mastercard and Lufax Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mastercard and Lufax Holding, you can compare the effects of market volatilities on Mastercard and Lufax Holding 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 Mastercard with a short position of Lufax Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mastercard and Lufax Holding.

Diversification Opportunities for Mastercard and Lufax Holding

MastercardLufaxDiversified AwayMastercardLufaxDiversified Away100%
0.19
  Correlation Coefficient

Average diversification

The 3 months correlation between Mastercard and Lufax is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Mastercard and Lufax Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lufax Holding and Mastercard 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 Mastercard are associated (or correlated) with Lufax Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lufax Holding has no effect on the direction of Mastercard i.e., Mastercard and Lufax Holding go up and down completely randomly.

Pair Corralation between Mastercard and Lufax Holding

Allowing for the 90-day total investment horizon Mastercard is expected to generate 3.41 times less return on investment than Lufax Holding. But when comparing it to its historical volatility, Mastercard is 4.5 times less risky than Lufax Holding. It trades about 0.08 of its potential returns per unit of risk. Lufax Holding is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  193.00  in Lufax Holding on November 21, 2024 and sell it today you would earn a total of  95.00  from holding Lufax Holding or generate 49.22% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Mastercard  vs.  Lufax Holding

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-50510
JavaScript chart by amCharts 3.21.15MA LU
       Timeline  
Mastercard 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Mastercard are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Mastercard may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb500510520530540550560570
Lufax Holding 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Lufax Holding are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Lufax Holding unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2.32.42.52.62.72.82.93

Mastercard and Lufax Holding Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.2-2.4-1.6-0.790.00.841.692.543.39 0.050.100.150.200.250.300.35
JavaScript chart by amCharts 3.21.15MA LU
       Returns  

Pair Trading with Mastercard and Lufax Holding

The main advantage of trading using opposite Mastercard and Lufax Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mastercard position performs unexpectedly, Lufax Holding 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 Lufax Holding will offset losses from the drop in Lufax Holding's long position.
The idea behind Mastercard and Lufax Holding pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

Other Complementary Tools

Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios