Correlation Between Technology Telecommunicatio and Lufax Holding

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

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

Diversification Opportunities for Technology Telecommunicatio and Lufax Holding

-0.35

Correlation Coefficient

Technology Telecommunicatio  Lufax Holding

Very good diversification

The 3 months correlation between Technology and Lufax is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Technology Telecommunication A and Lufax Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lufax Holding and Technology Telecommunicatio 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 Technology Telecommunication Acquisition are associated (or correlated) with Lufax Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lufax Holding has no effect on the direction of Technology Telecommunicatio i.e., Technology Telecommunicatio and Lufax Holding go up and down completely randomly.

Pair Corralation between Technology Telecommunicatio and Lufax Holding

Assuming the 90 days horizon Technology Telecommunication Acquisition is expected to under-perform the Lufax Holding. But the stock apears to be less risky and, when comparing its historical volatility, Technology Telecommunication Acquisition is 7.2 times less risky than Lufax Holding. The stock trades about -0.01 of its potential returns per unit of risk. The Lufax Holding is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  228.00  in Lufax Holding on September 2, 2024 and sell it today you would earn a total of  17.00  from holding Lufax Holding or generate 7.46% return on investment over 90 days.

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

Technology Telecommunication A  vs.  Lufax Holding

Technology Telecommunicatio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Technology Telecommunication Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Technology Telecommunicatio is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Lufax Holding

Risk-Adjusted Performance

3 of 100

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 unfluctuating basic indicators, Lufax Holding unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Technology Telecommunicatio and Lufax Holding

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

The idea behind Technology Telecommunication Acquisition and Lufax Holding 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.