Correlation Between Lufax Holding and Axos Financial

Can any of the company-specific risk be diversified away by investing in both Lufax Holding and Axos Financial 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 Lufax Holding and Axos Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lufax Holding and Axos Financial, you can compare the effects of market volatilities on Lufax Holding and Axos Financial 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 Lufax Holding with a short position of Axos Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lufax Holding and Axos Financial.

Diversification Opportunities for Lufax Holding and Axos Financial

-0.36

Correlation Coefficient

Lufax Holding  Axos Financial

Very good diversification

The 3 months correlation between Lufax and Axos is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Lufax Holding and Axos Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axos Financial and Lufax Holding 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 Lufax Holding are associated (or correlated) with Axos Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axos Financial has no effect on the direction of Lufax Holding i.e., Lufax Holding and Axos Financial go up and down completely randomly.

Pair Corralation between Lufax Holding and Axos Financial

Allowing for the 90-day total investment horizon Lufax Holding is expected to generate 6.78 times more return on investment than Axos Financial. However, Lufax Holding is 6.78 times more volatile than Axos Financial. It trades about 0.15 of its potential returns per unit of risk. Axos Financial is currently generating about -0.15 per unit of risk. If you would invest  337.00  in Lufax Holding on January 20, 2024 and sell it today you would earn a total of  90.00  from holding Lufax Holding or generate 26.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Lufax Holding  vs.  Axos Financial

Lufax Holding

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lufax Holding are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Lufax Holding unveiled solid returns over the last few months and may actually be approaching a breakup point.

Axos Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Axos Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Lufax Holding and Axos Financial

The main advantage of trading using opposite Lufax Holding and Axos Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lufax Holding position performs unexpectedly, Axos Financial 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 Axos Financial will offset losses from the drop in Axos Financial's long position.

The idea behind Lufax Holding and Axos Financial 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.

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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..