Correlation Between Lufax Holding and BlackRock Energy

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

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

Diversification Opportunities for Lufax Holding and BlackRock Energy

-0.31

Correlation Coefficient

Lufax Holding  BlackRock Energy

Very good diversification

The 3 months correlation between Lufax and BlackRock is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Lufax Holding and BlackRock Energy and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Energy 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 BlackRock Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Energy has no effect on the direction of Lufax Holding i.e., Lufax Holding and BlackRock Energy go up and down completely randomly.

Pair Corralation between Lufax Holding and BlackRock Energy

Allowing for the 90-day total investment horizon Lufax Holding is expected to under-perform the BlackRock Energy. In addition to that, Lufax Holding is 5.31 times more volatile than BlackRock Energy and. It trades about -0.03 of its total potential returns per unit of risk. BlackRock Energy and is currently generating about 0.02 per unit of volatility. If you would invest  1,252  in BlackRock Energy and on September 26, 2024 and sell it today you would earn a total of  13.00  from holding BlackRock Energy and or generate 1.04% return on investment over 90 days.

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

Lufax Holding  vs.  BlackRock Energy and

Lufax Holding

Risk-Adjusted Performance

0 of 100

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 latest abnormal performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

BlackRock Energy

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Energy and are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, BlackRock Energy is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Lufax Holding and BlackRock Energy

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

The idea behind Lufax Holding and BlackRock Energy and 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.