Correlation Between Lufax Holding and Visa

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Can any of the company-specific risk be diversified away by investing in both Lufax Holding and Visa 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 Visa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lufax Holding and Visa Class A, you can compare the effects of market volatilities on Lufax Holding and Visa 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 Visa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lufax Holding and Visa.

Diversification Opportunities for Lufax Holding and Visa

-0.84
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Lufax and Visa is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Lufax Holding and Visa Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visa Class A 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 Visa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visa Class A has no effect on the direction of Lufax Holding i.e., Lufax Holding and Visa go up and down completely randomly.

Pair Corralation between Lufax Holding and Visa

Allowing for the 90-day total investment horizon Lufax Holding is expected to under-perform the Visa. In addition to that, Lufax Holding is 4.05 times more volatile than Visa Class A. It trades about -0.04 of its total potential returns per unit of risk. Visa Class A is currently generating about 0.06 per unit of volatility. If you would invest  19,717  in Visa Class A on November 24, 2023 and sell it today you would earn a total of  7,959  from holding Visa Class A or generate 40.37% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Lufax Holding  vs.  Visa Class A

 Performance 
       Timeline  
Lufax Holding 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Lufax Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
Visa Class A 

Risk-Adjusted Performance

15 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Visa may actually be approaching a critical reversion point that can send shares even higher in March 2024.

Lufax Holding and Visa Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lufax Holding and Visa

The main advantage of trading using opposite Lufax Holding and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lufax Holding position performs unexpectedly, Visa 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 Visa will offset losses from the drop in Visa's long position.
The idea behind Lufax Holding and Visa Class A 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.
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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