Correlation Between Lexinfintech Holdings and Atlanticus Holdings

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

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

Diversification Opportunities for Lexinfintech Holdings and Atlanticus Holdings

0.06

Correlation Coefficient

Lexinfintech Holdings  Atlanticus Holdings

Significant diversification

The 3 months correlation between Lexinfintech and Atlanticus is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Lexinfintech Holdings and Atlanticus Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlanticus Holdings and Lexinfintech Holdings 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 Lexinfintech Holdings are associated (or correlated) with Atlanticus Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlanticus Holdings has no effect on the direction of Lexinfintech Holdings i.e., Lexinfintech Holdings and Atlanticus Holdings go up and down completely randomly.

Pair Corralation between Lexinfintech Holdings and Atlanticus Holdings

Allowing for the 90-day total investment horizon Lexinfintech Holdings is expected to generate 0.49 times more return on investment than Atlanticus Holdings. However, Lexinfintech Holdings is 2.03 times less risky than Atlanticus Holdings. It trades about 0.04 of its potential returns per unit of risk. Atlanticus Holdings is currently generating about -0.07 per unit of risk. If you would invest  182.00  in Lexinfintech Holdings on March 4, 2024 and sell it today you would earn a total of  2.00  from holding Lexinfintech Holdings or generate 1.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Lexinfintech Holdings  vs.  Atlanticus Holdings

Lexinfintech Holdings

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lexinfintech Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Lexinfintech Holdings may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Atlanticus Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atlanticus Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in July 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Lexinfintech Holdings and Atlanticus Holdings

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

The idea behind Lexinfintech Holdings and Atlanticus 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.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.