Correlation Between Regional Management and Lufax Holding
Can any of the company-specific risk be diversified away by investing in both Regional Management 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 Regional Management and Lufax Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regional Management Corp and Lufax Holding, you can compare the effects of market volatilities on Regional Management 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 Regional Management with a short position of Lufax Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regional Management and Lufax Holding.
Diversification Opportunities for Regional Management and Lufax Holding
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Regional and Lufax is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Regional Management Corp and Lufax Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lufax Holding and Regional Management 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 Regional Management Corp 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 Regional Management i.e., Regional Management and Lufax Holding go up and down completely randomly.
Pair Corralation between Regional Management and Lufax Holding
Allowing for the 90-day total investment horizon Regional Management Corp is expected to generate 1.0 times more return on investment than Lufax Holding. However, Regional Management is 1.0 times more volatile than Lufax Holding. It trades about -0.01 of its potential returns per unit of risk. Lufax Holding is currently generating about -0.26 per unit of risk. If you would invest 2,993 in Regional Management Corp on August 24, 2024 and sell it today you would lose (57.00) from holding Regional Management Corp or give up 1.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regional Management Corp vs. Lufax Holding
Performance |
| Timeline |
| Regional Management Corp |
| Lufax Holding |
Regional Management and Lufax Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regional Management and Lufax Holding
The main advantage of trading using opposite Regional Management and Lufax Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regional Management 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.| Regional Management vs. SLM Corp Pb | Regional Management vs. FirstCash | Regional Management vs. Navient Corp | Regional Management vs. Orix Corp Ads |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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