Correlation Between 360 Finance and Lufax Holding
Can any of the company-specific risk be diversified away by investing in both 360 Finance 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 360 Finance and Lufax Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 360 Finance and Lufax Holding, you can compare the effects of market volatilities on 360 Finance 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 360 Finance with a short position of Lufax Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of 360 Finance and Lufax Holding.
Diversification Opportunities for 360 Finance and Lufax Holding
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 360 and Lufax is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding 360 Finance and Lufax Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lufax Holding and 360 Finance 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 360 Finance 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 360 Finance i.e., 360 Finance and Lufax Holding go up and down completely randomly.
Pair Corralation between 360 Finance and Lufax Holding
Given the investment horizon of 90 days 360 Finance is expected to generate 1.18 times more return on investment than Lufax Holding. However, 360 Finance is 1.18 times more volatile than Lufax Holding. It trades about -0.03 of its potential returns per unit of risk. Lufax Holding is currently generating about -0.23 per unit of risk. If you would invest 3,498 in 360 Finance on August 27, 2024 and sell it today you would lose (113.00) from holding 360 Finance or give up 3.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
360 Finance vs. Lufax Holding
Performance |
| Timeline |
| 360 Finance |
| Lufax Holding |
360 Finance and Lufax Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 360 Finance and Lufax Holding
The main advantage of trading using opposite 360 Finance and Lufax Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 360 Finance 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.| 360 Finance vs. SLM Corp | 360 Finance vs. Orix Corp Ads | 360 Finance vs. FirstCash | 360 Finance vs. Medallion Financial Corp |
| Lufax Holding vs. SLM Corp | Lufax Holding vs. Orix Corp Ads | Lufax Holding vs. FirstCash | Lufax Holding vs. Medallion Financial Corp |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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