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
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.
|3 Months [change]
Lufax Holding vs. Visa Class A
Lufax Holding and Visa Volatility Contrast
Pair Trading with Lufax Holding and VisaThe 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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