Correlation Between Converge Technology and 9F

Can any of the company-specific risk be diversified away by investing in both Converge Technology and 9F 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 Converge Technology and 9F into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Converge Technology Solutions and 9F Inc, you can compare the effects of market volatilities on Converge Technology and 9F 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 Converge Technology with a short position of 9F. Check out your portfolio center. Please also check ongoing floating volatility patterns of Converge Technology and 9F.

Diversification Opportunities for Converge Technology and 9F

0.53

Correlation Coefficient

Converge Technology  9F

Very weak diversification

The 3 months correlation between Converge and 9F is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Converge Technology Solutions and 9F Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 9F Inc and Converge Technology 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 Converge Technology Solutions are associated (or correlated) with 9F. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 9F Inc has no effect on the direction of Converge Technology i.e., Converge Technology and 9F go up and down completely randomly.

Pair Corralation between Converge Technology and 9F

Assuming the 90 days horizon Converge Technology Solutions is expected to under-perform the 9F. But the otc stock apears to be less risky and, when comparing its historical volatility, Converge Technology Solutions is 2.98 times less risky than 9F. The otc stock trades about -0.1 of its potential returns per unit of risk. The 9F Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  182.00  in 9F Inc on September 12, 2024 and sell it today you would lose (24.50) from holding 9F Inc or give up 13.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Converge Technology Solutions  vs.  9F Inc

Converge Technology

Risk-Adjusted Performance

0 of 100

Very Weak

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

9F Inc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in 9F Inc 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, 9F unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Converge Technology and 9F

The main advantage of trading using opposite Converge Technology and 9F positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Converge Technology position performs unexpectedly, 9F 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 9F will offset losses from the drop in 9F's long position.

The idea behind Converge Technology Solutions and 9F Inc 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.