Correlation Between FINCORP INVESTMENT and CIM FINANCIAL

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

By analyzing existing cross correlation between FINCORP INVESTMENT LTD and CIM FINANCIAL SERVICES, you can compare the effects of market volatilities on FINCORP INVESTMENT and CIM 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 FINCORP INVESTMENT with a short position of CIM FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of FINCORP INVESTMENT and CIM FINANCIAL.

Diversification Opportunities for FINCORP INVESTMENT and CIM FINANCIAL

0.23

Correlation Coefficient

FINCORP INVESTMENT  CIM FINANCIAL

Modest diversification

The 3 months correlation between FINCORP and CIM is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding FINCORP INVESTMENT LTD and CIM FINANCIAL SERVICES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIM FINANCIAL SERVICES and FINCORP INVESTMENT 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 FINCORP INVESTMENT LTD are associated (or correlated) with CIM FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIM FINANCIAL SERVICES has no effect on the direction of FINCORP INVESTMENT i.e., FINCORP INVESTMENT and CIM FINANCIAL go up and down completely randomly.

Pair Corralation between FINCORP INVESTMENT and CIM FINANCIAL

Assuming the 90 days trading horizon FINCORP INVESTMENT is expected to generate 1.1 times less return on investment than CIM FINANCIAL. In addition to that, FINCORP INVESTMENT is 1.2 times more volatile than CIM FINANCIAL SERVICES. It trades about 0.12 of its total potential returns per unit of risk. CIM FINANCIAL SERVICES is currently generating about 0.15 per unit of volatility. If you would invest  1,400  in CIM FINANCIAL SERVICES on December 30, 2024 and sell it today you would earn a total of  200.00  from holding CIM FINANCIAL SERVICES or generate 14.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

FINCORP INVESTMENT LTD  vs.  CIM FINANCIAL SERVICES

FINCORP INVESTMENT LTD

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FINCORP INVESTMENT LTD are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, FINCORP INVESTMENT exhibited solid returns over the last few months and may actually be approaching a breakup point.

CIM FINANCIAL SERVICES

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CIM FINANCIAL SERVICES are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, CIM FINANCIAL displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FINCORP INVESTMENT and CIM FINANCIAL

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

The idea behind FINCORP INVESTMENT LTD and CIM FINANCIAL SERVICES 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.