Correlation Between LPL Financial and Up Fintech

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

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

Diversification Opportunities for LPL Financial and Up Fintech

0.66

Correlation Coefficient

LPL Financial  Up Fintech

Poor diversification

The 3 months correlation between LPL and TIGR is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding LPL Financial Holdings and Up Fintech Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Up Fintech Holding and LPL Financial 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 LPL Financial Holdings are associated (or correlated) with Up Fintech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Up Fintech Holding has no effect on the direction of LPL Financial i.e., LPL Financial and Up Fintech go up and down completely randomly.

Pair Corralation between LPL Financial and Up Fintech

Given the investment horizon of 90 days LPL Financial Holdings is expected to generate 0.66 times more return on investment than Up Fintech. However, LPL Financial Holdings is 1.52 times less risky than Up Fintech. It trades about 0.37 of its potential returns per unit of risk. Up Fintech Holding is currently generating about -0.12 per unit of risk. If you would invest  33,380  in LPL Financial Holdings on March 6, 2025 and sell it today you would earn a total of  5,221  from holding LPL Financial Holdings or generate 15.64% return on investment over 90 days.

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

LPL Financial Holdings  vs.  Up Fintech Holding

LPL Financial Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in LPL Financial Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal essential indicators, LPL Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Up Fintech Holding

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Up Fintech Holding are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain technical and fundamental indicators, Up Fintech reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LPL Financial and Up Fintech

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

The idea behind LPL Financial Holdings and Up Fintech 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.