Correlation Between Lexinfintech Holdings and Solowin Holdings

Can any of the company-specific risk be diversified away by investing in both Lexinfintech Holdings and Solowin 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 Solowin 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 Solowin Holdings Ordinary, you can compare the effects of market volatilities on Lexinfintech Holdings and Solowin 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 Solowin Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lexinfintech Holdings and Solowin Holdings.

Diversification Opportunities for Lexinfintech Holdings and Solowin Holdings

-0.83

Correlation Coefficient

Lexinfintech Holdings  Solowin Holdings

Pay attention - limited upside

The 3 months correlation between Lexinfintech and Solowin is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Lexinfintech Holdings and Solowin Holdings Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solowin Holdings Ordinary 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 Solowin Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solowin Holdings Ordinary has no effect on the direction of Lexinfintech Holdings i.e., Lexinfintech Holdings and Solowin Holdings go up and down completely randomly.

Pair Corralation between Lexinfintech Holdings and Solowin Holdings

Allowing for the 90-day total investment horizon Lexinfintech Holdings is expected to generate 0.26 times more return on investment than Solowin Holdings. However, Lexinfintech Holdings is 3.82 times less risky than Solowin Holdings. It trades about 0.22 of its potential returns per unit of risk. Solowin Holdings Ordinary is currently generating about 0.02 per unit of risk. If you would invest  599.00  in Lexinfintech Holdings on October 24, 2024 and sell it today you would earn a total of  80.00  from holding Lexinfintech Holdings or generate 13.36% return on investment over 90 days.

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

Lexinfintech Holdings  vs.  Solowin Holdings Ordinary

Lexinfintech Holdings

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lexinfintech Holdings are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Lexinfintech Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Solowin Holdings Ordinary

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Solowin Holdings Ordinary has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Etf's forward indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

Pair Trading with Lexinfintech Holdings and Solowin Holdings

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

The idea behind Lexinfintech Holdings and Solowin Holdings Ordinary 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.