Correlation Between BASE and Oneconnect Financial

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

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

Diversification Opportunities for BASE and Oneconnect Financial

0.14

Correlation Coefficient

BASE  Oneconnect Financial

Average diversification

The 3 months correlation between BASE and Oneconnect is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding BASE Inc and Oneconnect Financial Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oneconnect Financial and BASE 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 BASE Inc are associated (or correlated) with Oneconnect Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oneconnect Financial has no effect on the direction of BASE i.e., BASE and Oneconnect Financial go up and down completely randomly.

Pair Corralation between BASE and Oneconnect Financial

Assuming the 90 days horizon BASE Inc is expected to generate 1.1 times more return on investment than Oneconnect Financial. However, BASE is 1.1 times more volatile than Oneconnect Financial Technology. It trades about 0.25 of its potential returns per unit of risk. Oneconnect Financial Technology is currently generating about 0.0 per unit of risk. If you would invest  150.00  in BASE Inc on October 13, 2024 and sell it today you would earn a total of  49.00  from holding BASE Inc or generate 32.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

BASE Inc  vs.  Oneconnect Financial Technolog

BASE Inc

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BASE Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, BASE reported solid returns over the last few months and may actually be approaching a breakup point.

Oneconnect Financial

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Oneconnect Financial Technology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Oneconnect Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BASE and Oneconnect Financial

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

The idea behind BASE Inc and Oneconnect Financial Technology 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.