Correlation Between Lufax Holding and SWK Holdings
Can any of the company-specific risk be diversified away by investing in both Lufax Holding and SWK 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 Lufax Holding and SWK Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lufax Holding and SWK Holdings, you can compare the effects of market volatilities on Lufax Holding and SWK 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 Lufax Holding with a short position of SWK Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lufax Holding and SWK Holdings.
Diversification Opportunities for Lufax Holding and SWK Holdings
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lufax and SWK is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Lufax Holding and SWK Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SWK Holdings 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 SWK Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SWK Holdings has no effect on the direction of Lufax Holding i.e., Lufax Holding and SWK Holdings go up and down completely randomly.
Pair Corralation between Lufax Holding and SWK Holdings
Allowing for the 90-day total investment horizon Lufax Holding is expected to generate 11.17 times more return on investment than SWK Holdings. However, Lufax Holding is 11.17 times more volatile than SWK Holdings. It trades about 0.12 of its potential returns per unit of risk. SWK Holdings is currently generating about 0.03 per unit of risk. If you would invest 253.00 in Lufax Holding on December 17, 2024 and sell it today you would earn a total of 66.00 from holding Lufax Holding or generate 26.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Lufax Holding vs. SWK Holdings
Performance |
Timeline |
Lufax Holding |
SWK Holdings |
Lufax Holding and SWK Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lufax Holding and SWK Holdings
The main advantage of trading using opposite Lufax Holding and SWK Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lufax Holding position performs unexpectedly, SWK 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 SWK Holdings will offset losses from the drop in SWK Holdings' long position.Lufax Holding vs. 360 Finance | Lufax Holding vs. FinVolution Group | Lufax Holding vs. Qudian Inc | Lufax Holding vs. X Financial Class |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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