Correlation Between Qudian and Lexinfintech Holdings
Can any of the company-specific risk be diversified away by investing in both Qudian and Lexinfintech Holdings 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 Qudian and Lexinfintech Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qudian Inc and Lexinfintech Holdings, you can compare the effects of market volatilities on Qudian and Lexinfintech Holdings 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 Qudian with a short position of Lexinfintech Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qudian and Lexinfintech Holdings.
Diversification Opportunities for Qudian and Lexinfintech Holdings
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Qudian and Lexinfintech is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Qudian Inc and Lexinfintech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lexinfintech Holdings and Qudian 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 Qudian Inc are associated (or correlated) with Lexinfintech Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lexinfintech Holdings has no effect on the direction of Qudian i.e., Qudian and Lexinfintech Holdings go up and down completely randomly.
Pair Corralation between Qudian and Lexinfintech Holdings
Allowing for the 90-day total investment horizon Qudian Inc is expected to generate 0.51 times more return on investment than Lexinfintech Holdings. However, Qudian Inc is 1.95 times less risky than Lexinfintech Holdings. It trades about 0.18 of its potential returns per unit of risk. Lexinfintech Holdings is currently generating about 0.05 per unit of risk. If you would invest 226.00 in Qudian Inc on August 24, 2024 and sell it today you would earn a total of 22.00 from holding Qudian Inc or generate 9.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Qudian Inc vs. Lexinfintech Holdings
Performance |
| Timeline |
| Qudian Inc |
| Lexinfintech Holdings |
Qudian and Lexinfintech Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qudian and Lexinfintech Holdings
The main advantage of trading using opposite Qudian and Lexinfintech Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qudian position performs unexpectedly, Lexinfintech Holdings 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 Lexinfintech Holdings will offset losses from the drop in Lexinfintech Holdings' long position.| Qudian vs. X Financial Class | Qudian vs. FinVolution Group | Qudian vs. Senmiao Technology | Qudian vs. Lexinfintech Holdings |
| Lexinfintech Holdings vs. Visa Class A | Lexinfintech Holdings vs. Mastercard | Lexinfintech Holdings vs. SoFi Technologies | Lexinfintech Holdings vs. Coca Cola Consolidated |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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