Correlation Between FinVolution and R Co

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

By analyzing existing cross correlation between FinVolution Group and R co Valor F, you can compare the effects of market volatilities on FinVolution and R Co 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 FinVolution with a short position of R Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of FinVolution and R Co.

Diversification Opportunities for FinVolution and R Co

0.46

Correlation Coefficient

FinVolution  R Co

Very weak diversification

The 3 months correlation between FinVolution and 0P00017SX2 is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding FinVolution Group and R co Valor F in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on R co Valor and FinVolution 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 FinVolution Group are associated (or correlated) with R Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of R co Valor has no effect on the direction of FinVolution i.e., FinVolution and R Co go up and down completely randomly.

Pair Corralation between FinVolution and R Co

Given the investment horizon of 90 days FinVolution Group is expected to generate 3.19 times more return on investment than R Co. However, FinVolution is 3.19 times more volatile than R co Valor F. It trades about 0.04 of its potential returns per unit of risk. R co Valor F is currently generating about 0.06 per unit of risk. If you would invest  496.00  in FinVolution Group on October 4, 2024 and sell it today you would earn a total of  175.00  from holding FinVolution Group or generate 35.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.0%
Values	Daily Returns

FinVolution Group  vs.  R co Valor F

FinVolution Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FinVolution Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, FinVolution is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

R co Valor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days R co Valor F has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, R Co is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with FinVolution and R Co

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

The idea behind FinVolution Group and R co Valor F 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.