Correlation Between ACNB and Lexinfintech Holdings
Can any of the company-specific risk be diversified away by investing in both ACNB 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 ACNB and Lexinfintech Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ACNB Corporation and Lexinfintech Holdings, you can compare the effects of market volatilities on ACNB 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 ACNB with a short position of Lexinfintech Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACNB and Lexinfintech Holdings.
Diversification Opportunities for ACNB and Lexinfintech Holdings
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ACNB and Lexinfintech is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding ACNB Corp. and Lexinfintech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lexinfintech Holdings and ACNB 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 ACNB Corporation 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 ACNB i.e., ACNB and Lexinfintech Holdings go up and down completely randomly.
Pair Corralation between ACNB and Lexinfintech Holdings
Given the investment horizon of 90 days ACNB Corporation is expected to generate 1.66 times more return on investment than Lexinfintech Holdings. However, ACNB is 1.66 times more volatile than Lexinfintech Holdings. It trades about 0.0 of its potential returns per unit of risk. Lexinfintech Holdings is currently generating about -0.17 per unit of risk. If you would invest 3,510 in ACNB Corporation on January 24, 2024 and sell it today you would lose (34.00) from holding ACNB Corporation or give up 0.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ACNB Corp. vs. Lexinfintech Holdings
Performance |
| Timeline |
| ACNB |
| Lexinfintech Holdings |
ACNB and Lexinfintech Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACNB and Lexinfintech Holdings
The main advantage of trading using opposite ACNB and Lexinfintech Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACNB 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.The idea behind ACNB Corporation and Lexinfintech Holdings 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.| Lexinfintech Holdings vs. Visa Class A | Lexinfintech Holdings vs. Mastercard | Lexinfintech Holdings vs. Oshidori International Holdings | Lexinfintech Holdings vs. US70082LAB36 |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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