Correlation Between Lufax Holding and Ameriprise Financial

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

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

Diversification Opportunities for Lufax Holding and Ameriprise Financial

-0.74

Correlation Coefficient

Lufax Holding  Ameriprise Financial

Pay attention - limited upside

The 3 months correlation between Lufax and Ameriprise is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Lufax Holding and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and Lufax Holding 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 Lufax Holding are associated (or correlated) with Ameriprise Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameriprise Financial has no effect on the direction of Lufax Holding i.e., Lufax Holding and Ameriprise Financial go up and down completely randomly.

Pair Corralation between Lufax Holding and Ameriprise Financial

Allowing for the 90-day total investment horizon Lufax Holding is expected to under-perform the Ameriprise Financial. In addition to that, Lufax Holding is 2.56 times more volatile than Ameriprise Financial. It trades about -0.12 of its total potential returns per unit of risk. Ameriprise Financial is currently generating about 0.12 per unit of volatility. If you would invest  47,176  in Ameriprise Financial on October 1, 2024 and sell it today you would earn a total of  6,419  from holding Ameriprise Financial or generate 13.61% return on investment over 90 days.

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

Lufax Holding  vs.  Ameriprise Financial

Lufax Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lufax Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Ameriprise Financial

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ameriprise Financial are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain primary indicators, Ameriprise Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lufax Holding and Ameriprise Financial

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

The idea behind Lufax Holding and Ameriprise Financial 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.