Correlation Between Nisun International and Lufax Holding

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

By analyzing existing cross correlation between Nisun International Enterprise and Lufax Holding, you can compare the effects of market volatilities on Nisun International and Lufax Holding 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 Nisun International with a short position of Lufax Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nisun International and Lufax Holding.

Diversification Opportunities for Nisun International and Lufax Holding

0.59

Correlation Coefficient

Nisun International  Lufax Holding

Very weak diversification

The 3 months correlation between Nisun and Lufax is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Nisun International Enterprise and Lufax Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lufax Holding and Nisun International 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 Nisun International Enterprise are associated (or correlated) with Lufax Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lufax Holding has no effect on the direction of Nisun International i.e., Nisun International and Lufax Holding go up and down completely randomly.

Pair Corralation between Nisun International and Lufax Holding

Given the investment horizon of 90 days Nisun International Enterprise is expected to generate 1.52 times more return on investment than Lufax Holding. However, Nisun International is 1.52 times more volatile than Lufax Holding. It trades about 0.08 of its potential returns per unit of risk. Lufax Holding is currently generating about 0.12 per unit of risk. If you would invest  624.00  in Nisun International Enterprise on December 27, 2024 and sell it today you would earn a total of  118.00  from holding Nisun International Enterprise or generate 18.91% return on investment over 90 days.

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

Nisun International Enterprise  vs.  Lufax Holding

Nisun International

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nisun International Enterprise are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Nisun International displayed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Nisun International and Lufax Holding

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

The idea behind Nisun International Enterprise and Lufax Holding 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.