Correlation Between X Financial and Lexinfintech Holdings
Can any of the company-specific risk be diversified away by investing in both X Financial 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 X Financial and Lexinfintech Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between X Financial Class and Lexinfintech Holdings, you can compare the effects of market volatilities on X Financial 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 X Financial with a short position of Lexinfintech Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Financial and Lexinfintech Holdings.
Diversification Opportunities for X Financial and Lexinfintech Holdings
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between XYF and Lexinfintech is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding X Financial Class and Lexinfintech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lexinfintech Holdings and X Financial 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 X Financial Class 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 X Financial i.e., X Financial and Lexinfintech Holdings go up and down completely randomly.
Pair Corralation between X Financial and Lexinfintech Holdings
Considering the 90-day investment horizon X Financial Class is expected to under-perform the Lexinfintech Holdings. But the stock apears to be less risky and, when comparing its historical volatility, X Financial Class is 2.58 times less risky than Lexinfintech Holdings. The stock trades about -0.03 of its potential returns per unit of risk. The Lexinfintech Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 331.00 in Lexinfintech Holdings on August 28, 2024 and sell it today you would earn a total of 9.00 from holding Lexinfintech Holdings or generate 2.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
X Financial Class vs. Lexinfintech Holdings
Performance |
| Timeline |
| X Financial Class |
| Lexinfintech Holdings |
X Financial and Lexinfintech Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X Financial and Lexinfintech Holdings
The main advantage of trading using opposite X Financial and Lexinfintech Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X Financial 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.| X Financial vs. LM Funding America | X Financial vs. Nisun International Enterprise | X Financial vs. Qudian Inc | X Financial vs. FinVolution Group |
| Lexinfintech Holdings vs. SLM Corp | Lexinfintech Holdings vs. Orix Corp Ads | Lexinfintech Holdings vs. FirstCash | Lexinfintech Holdings 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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