Correlation Between Lufax Holding and Mill City

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

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

Diversification Opportunities for Lufax Holding and Mill City

-0.6

Correlation Coefficient

Lufax Holding  Mill City

Excellent diversification

The 3 months correlation between Lufax and Mill is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Lufax Holding and Mill City Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mill City Ventures 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 Mill City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mill City Ventures has no effect on the direction of Lufax Holding i.e., Lufax Holding and Mill City go up and down completely randomly.

Pair Corralation between Lufax Holding and Mill City

Allowing for the 90-day total investment horizon Lufax Holding is expected to generate 0.48 times more return on investment than Mill City. However, Lufax Holding is 2.07 times less risky than Mill City. It trades about 0.12 of its potential returns per unit of risk. Mill City Ventures is currently generating about 0.02 per unit of risk. If you would invest  243.00  in Lufax Holding on December 27, 2024 and sell it today you would earn a total of  63.00  from holding Lufax Holding or generate 25.93% return on investment over 90 days.

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

Lufax Holding  vs.  Mill City Ventures

Lufax Holding

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lufax Holding are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Lufax Holding unveiled solid returns over the last few months and may actually be approaching a breakup point.

Mill City Ventures

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mill City Ventures are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Mill City may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Lufax Holding and Mill City

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

The idea behind Lufax Holding and Mill City Ventures 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.