Correlation Between Lufax Holding and Jianpu Technology

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

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

Diversification Opportunities for Lufax Holding and Jianpu Technology

0.0

Correlation Coefficient

Lufax Holding  Jianpu Technology

Pay attention - limited upside

The 3 months correlation between Lufax and Jianpu is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lufax Holding and Jianpu Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jianpu Technology 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 Jianpu Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jianpu Technology has no effect on the direction of Lufax Holding i.e., Lufax Holding and Jianpu Technology go up and down completely randomly.

Pair Corralation between Lufax Holding and Jianpu Technology

If you would invest  125.00  in Lufax Holding on November 20, 2024 and sell it today you would earn a total of  163.00  from holding Lufax Holding or generate 130.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Lufax Holding  vs.  Jianpu Technology

Lufax Holding

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lufax Holding are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Lufax Holding unveiled solid returns over the last few months and may actually be approaching a breakup point.

Jianpu Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jianpu Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Jianpu Technology is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Lufax Holding and Jianpu Technology

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

The idea behind Lufax Holding and Jianpu Technology 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.