Correlation Between Moneygram Int and Lexinfintech Holdings

Can any of the company-specific risk be diversified away by investing in both Moneygram Int and Lexinfintech 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 Moneygram Int and Lexinfintech Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Moneygram Int and Lexinfintech Holdings, you can compare the effects of market volatilities on Moneygram Int and Lexinfintech 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 Moneygram Int with a short position of Lexinfintech Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moneygram Int and Lexinfintech Holdings.

Diversification Opportunities for Moneygram Int and Lexinfintech Holdings

0.4

Correlation Coefficient

Moneygram Int  Lexinfintech Holdings

Very weak diversification

The 3 months correlation between Moneygram and Lexinfintech is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Moneygram Int and Lexinfintech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lexinfintech Holdings and Moneygram Int 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 Moneygram Int are associated (or correlated) with Lexinfintech Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lexinfintech Holdings has no effect on the direction of Moneygram Int i.e., Moneygram Int and Lexinfintech Holdings go up and down completely randomly.

Pair Corralation between Moneygram Int and Lexinfintech Holdings

If you would invest  339.00  in Lexinfintech Holdings on September 23, 2024 and sell it today you would earn a total of  252.00  from holding Lexinfintech Holdings or generate 74.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	4.76%
Values	Daily Returns

Moneygram Int  vs.  Lexinfintech Holdings

Moneygram Int

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Moneygram Int has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Moneygram Int is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Lexinfintech Holdings

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lexinfintech Holdings are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Lexinfintech Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Moneygram Int and Lexinfintech Holdings

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

The idea behind Moneygram Int and Lexinfintech Holdings 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.