Correlation Between Lexinfintech Holdings and Orix Corp
Can any of the company-specific risk be diversified away by investing in both Lexinfintech Holdings and Orix Corp 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 Orix Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lexinfintech Holdings and Orix Corp Ads, you can compare the effects of market volatilities on Lexinfintech Holdings and Orix Corp 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 Orix Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lexinfintech Holdings and Orix Corp.
Diversification Opportunities for Lexinfintech Holdings and Orix Corp
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lexinfintech and Orix is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Lexinfintech Holdings and Orix Corp Ads in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orix Corp Ads 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 Orix Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orix Corp Ads has no effect on the direction of Lexinfintech Holdings i.e., Lexinfintech Holdings and Orix Corp go up and down completely randomly.
Pair Corralation between Lexinfintech Holdings and Orix Corp
Allowing for the 90-day total investment horizon Lexinfintech Holdings is expected to generate 1.45 times more return on investment than Orix Corp. However, Lexinfintech Holdings is 1.45 times more volatile than Orix Corp Ads. It trades about -0.1 of its potential returns per unit of risk. Orix Corp Ads is currently generating about -0.2 per unit of risk. If you would invest 177.00 in Lexinfintech Holdings on January 25, 2024 and sell it today you would lose (8.00) from holding Lexinfintech Holdings or give up 4.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lexinfintech Holdings vs. Orix Corp Ads
Performance |
| Timeline |
| Lexinfintech Holdings |
| Orix Corp Ads |
Lexinfintech Holdings and Orix Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lexinfintech Holdings and Orix Corp
The main advantage of trading using opposite Lexinfintech Holdings and Orix Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lexinfintech Holdings position performs unexpectedly, Orix Corp 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 Orix Corp will offset losses from the drop in Orix Corp's long position.| Lexinfintech Holdings vs. 360 Finance | Lexinfintech Holdings vs. Atlanticus Holdings | Lexinfintech Holdings vs. Qudian Inc | Lexinfintech Holdings vs. Enova International |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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