Correlation Between Lexinfintech Holdings and VentureNet Capital

Can any of the company-specific risk be diversified away by investing in both Lexinfintech Holdings and VentureNet Capital 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 VentureNet Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lexinfintech Holdings and VentureNet Capital Group, you can compare the effects of market volatilities on Lexinfintech Holdings and VentureNet Capital 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 VentureNet Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lexinfintech Holdings and VentureNet Capital.

Diversification Opportunities for Lexinfintech Holdings and VentureNet Capital

-0.36

Correlation Coefficient

Lexinfintech Holdings  VentureNet Capital

Very good diversification

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

Pair Corralation between Lexinfintech Holdings and VentureNet Capital

If you would invest  167.00  in Lexinfintech Holdings on August 22, 2024 and sell it today you would earn a total of  155.00  from holding Lexinfintech Holdings or generate 92.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.67%
Values	Daily Returns

Lexinfintech Holdings  vs.  VentureNet Capital Group

Lexinfintech Holdings

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lexinfintech Holdings are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Lexinfintech Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

VentureNet Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VentureNet Capital Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Lexinfintech Holdings and VentureNet Capital

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

The idea behind Lexinfintech Holdings and VentureNet Capital Group 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.