Correlation Between Lexinfintech Holdings and EZCORP
Can any of the company-specific risk be diversified away by investing in both Lexinfintech Holdings and EZCORP 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 EZCORP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lexinfintech Holdings and EZCORP Inc, you can compare the effects of market volatilities on Lexinfintech Holdings and EZCORP 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 EZCORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lexinfintech Holdings and EZCORP.
Diversification Opportunities for Lexinfintech Holdings and EZCORP
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lexinfintech and EZCORP is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Lexinfintech Holdings and EZCORP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EZCORP Inc 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 EZCORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EZCORP Inc has no effect on the direction of Lexinfintech Holdings i.e., Lexinfintech Holdings and EZCORP go up and down completely randomly.
Pair Corralation between Lexinfintech Holdings and EZCORP
Allowing for the 90-day total investment horizon Lexinfintech Holdings is expected to generate 174.0 times less return on investment than EZCORP. In addition to that, Lexinfintech Holdings is 1.69 times more volatile than EZCORP Inc. It trades about 0.0 of its total potential returns per unit of risk. EZCORP Inc is currently generating about 0.19 per unit of volatility. If you would invest 865.00 in EZCORP Inc on January 20, 2024 and sell it today you would earn a total of 255.00 from holding EZCORP Inc or generate 29.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Lexinfintech Holdings vs. EZCORP Inc
Performance |
| Timeline |
| Lexinfintech Holdings |
| EZCORP Inc |
Lexinfintech Holdings and EZCORP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lexinfintech Holdings and EZCORP
The main advantage of trading using opposite Lexinfintech Holdings and EZCORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lexinfintech Holdings position performs unexpectedly, EZCORP 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 EZCORP will offset losses from the drop in EZCORP's long position.| Lexinfintech Holdings vs. Visa Class A | Lexinfintech Holdings vs. PayPal Holdings | Lexinfintech Holdings vs. Mastercard |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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