Correlation Between Qudian and Lufax Holding

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

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

Diversification Opportunities for Qudian and Lufax Holding

-0.15

Correlation Coefficient

Qudian  Lufax Holding

Good diversification

The 3 months correlation between Qudian and Lufax is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Qudian Inc and Lufax Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lufax Holding and Qudian 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 Qudian Inc 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 Qudian i.e., Qudian and Lufax Holding go up and down completely randomly.

Pair Corralation between Qudian and Lufax Holding

Allowing for the 90-day total investment horizon Qudian Inc is expected to generate 1.02 times more return on investment than Lufax Holding. However, Qudian is 1.02 times more volatile than Lufax Holding. It trades about 0.23 of its potential returns per unit of risk. Lufax Holding is currently generating about 0.04 per unit of risk. If you would invest  293.00  in Qudian Inc on May 7, 2025 and sell it today you would earn a total of  140.00  from holding Qudian Inc or generate 47.78% return on investment over 90 days.

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

Qudian Inc  vs.  Lufax Holding

Qudian Inc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Qudian Inc are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Qudian exhibited solid returns over the last few months and may actually be approaching a breakup point.

Lufax Holding

Risk-Adjusted Performance

Very Weak

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 may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Qudian and Lufax Holding

The main advantage of trading using opposite Qudian and Lufax Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qudian 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 Qudian Inc 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.