Correlation Between Lufax Holding and Evergreen Corp

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Can any of the company-specific risk be diversified away by investing in both Lufax Holding and Evergreen 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 Lufax Holding and Evergreen Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lufax Holding and Evergreen Corp, you can compare the effects of market volatilities on Lufax Holding and Evergreen 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 Lufax Holding with a short position of Evergreen Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lufax Holding and Evergreen Corp.

Diversification Opportunities for Lufax Holding and Evergreen Corp

-0.36
  Correlation Coefficient

Very good diversification

The 3 months correlation between Lufax and Evergreen is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Lufax Holding and Evergreen Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evergreen Corp 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 Evergreen Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evergreen Corp has no effect on the direction of Lufax Holding i.e., Lufax Holding and Evergreen Corp go up and down completely randomly.

Pair Corralation between Lufax Holding and Evergreen Corp

Allowing for the 90-day total investment horizon Lufax Holding is expected to under-perform the Evergreen Corp. In addition to that, Lufax Holding is 39.68 times more volatile than Evergreen Corp. It trades about -0.08 of its total potential returns per unit of risk. Evergreen Corp is currently generating about 0.16 per unit of volatility. If you would invest  1,178  in Evergreen Corp on September 23, 2024 and sell it today you would earn a total of  8.00  from holding Evergreen Corp or generate 0.68% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Lufax Holding  vs.  Evergreen Corp

 Performance 
       Timeline  
Lufax Holding 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Lufax Holding are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Lufax Holding unveiled solid returns over the last few months and may actually be approaching a breakup point.
Evergreen Corp 

Risk-Adjusted Performance

22 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Evergreen Corp are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, Evergreen Corp is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Lufax Holding and Evergreen Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lufax Holding and Evergreen Corp

The main advantage of trading using opposite Lufax Holding and Evergreen Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lufax Holding position performs unexpectedly, Evergreen 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 Evergreen Corp will offset losses from the drop in Evergreen Corp's long position.
The idea behind Lufax Holding and Evergreen Corp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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