Correlation Between Nisun International and Lexinfintech Holdings

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

Diversification Opportunities for Nisun International and Lexinfintech Holdings

-0.21

Correlation Coefficient

Nisun International  Lexinfintech Holdings

Very good diversification

The 3 months correlation between Nisun and Lexinfintech is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Nisun International Enterprise and Lexinfintech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lexinfintech Holdings 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 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 Nisun International i.e., Nisun International and Lexinfintech Holdings go up and down completely randomly.

Pair Corralation between Nisun International and Lexinfintech Holdings

Given the investment horizon of 90 days Nisun International is expected to generate 10.83 times less return on investment than Lexinfintech Holdings. In addition to that, Nisun International is 1.09 times more volatile than Lexinfintech Holdings. It trades about 0.02 of its total potential returns per unit of risk. Lexinfintech Holdings is currently generating about 0.26 per unit of volatility. If you would invest  166.00  in Lexinfintech Holdings on August 30, 2024 and sell it today you would earn a total of  324.00  from holding Lexinfintech Holdings or generate 195.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Nisun International Enterprise  vs.  Lexinfintech Holdings

Nisun International

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nisun International Enterprise are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Nisun International may actually be approaching a critical reversion point that can send shares even higher in December 2024.

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.

Pair Trading with Nisun International and Lexinfintech Holdings

The main advantage of trading using opposite Nisun International and Lexinfintech Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nisun International 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 Nisun International Enterprise 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.