Correlation Between Lufax Holding and NYSE Composite
Can any of the company-specific risk be diversified away by investing in both Lufax Holding and NYSE Composite 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 NYSE Composite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lufax Holding and NYSE Composite, you can compare the effects of market volatilities on Lufax Holding and NYSE Composite 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 NYSE Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lufax Holding and NYSE Composite.
Diversification Opportunities for Lufax Holding and NYSE Composite
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lufax and NYSE is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Lufax Holding and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite 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 NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of Lufax Holding i.e., Lufax Holding and NYSE Composite go up and down completely randomly.
Pair Corralation between Lufax Holding and NYSE Composite
Allowing for the 90-day total investment horizon Lufax Holding is expected to under-perform the NYSE Composite. In addition to that, Lufax Holding is 5.45 times more volatile than NYSE Composite. It trades about -0.03 of its total potential returns per unit of risk. NYSE Composite is currently generating about 0.03 per unit of volatility. If you would invest 1,561,525 in NYSE Composite on January 19, 2024 and sell it today you would earn a total of 178,819 from holding NYSE Composite or generate 11.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 99.8% |
Values | Daily Returns |
Lufax Holding vs. NYSE Composite
Performance |
Timeline |
Lufax Holding and NYSE Composite Volatility Contrast
Predicted Return Density |
Returns |
Lufax Holding
Pair trading matchups for Lufax Holding
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with Lufax Holding and NYSE Composite
The main advantage of trading using opposite Lufax Holding and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lufax Holding position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.Lufax Holding vs. Mersana Therapeutics | Lufax Holding vs. Amtech Systems | Lufax Holding vs. First United |
NYSE Composite vs. Western Digital | NYSE Composite vs. Meta Data | NYSE Composite vs. Transphorm Technology | NYSE Composite vs. Playtika Holding 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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