Correlation Between CNFinance Holdings and OCN Old

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

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

Diversification Opportunities for CNFinance Holdings and OCN Old

-0.3

Correlation Coefficient

CNFinance Holdings  OCN Old

Very good diversification

The 3 months correlation between CNFinance and OCN is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding CNFinance Holdings and OCN Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OCN Old and CNFinance 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 CNFinance Holdings are associated (or correlated) with OCN Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OCN Old has no effect on the direction of CNFinance Holdings i.e., CNFinance Holdings and OCN Old go up and down completely randomly.

Pair Corralation between CNFinance Holdings and OCN Old

If you would invest  105.00  in CNFinance Holdings on October 9, 2024 and sell it today you would lose (1.00) from holding CNFinance Holdings or give up 0.95% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.26%
Values	Daily Returns

CNFinance Holdings  vs.  OCN Old

CNFinance Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CNFinance Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

OCN Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OCN Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, OCN Old is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with CNFinance Holdings and OCN Old

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

The idea behind CNFinance Holdings and OCN Old 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.