Correlation Between FinVolution and Lamar Advertising

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

By analyzing existing cross correlation between FinVolution Group and Lamar Advertising, you can compare the effects of market volatilities on FinVolution and Lamar Advertising 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 Lamar Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of FinVolution and Lamar Advertising.

Diversification Opportunities for FinVolution and Lamar Advertising

-0.07

Correlation Coefficient

FinVolution  Lamar Advertising

Good diversification

The 3 months correlation between FinVolution and Lamar is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding FinVolution Group and Lamar Advertising in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lamar Advertising 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 Lamar Advertising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lamar Advertising has no effect on the direction of FinVolution i.e., FinVolution and Lamar Advertising go up and down completely randomly.

Pair Corralation between FinVolution and Lamar Advertising

Given the investment horizon of 90 days FinVolution Group is expected to generate 1.92 times more return on investment than Lamar Advertising. However, FinVolution is 1.92 times more volatile than Lamar Advertising. It trades about 0.03 of its potential returns per unit of risk. Lamar Advertising is currently generating about -0.03 per unit of risk. If you would invest  675.00  in FinVolution Group on October 6, 2024 and sell it today you would earn a total of  16.00  from holding FinVolution Group or generate 2.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

FinVolution Group  vs.  Lamar Advertising

FinVolution Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FinVolution Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, FinVolution is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Lamar Advertising

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lamar Advertising has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Lamar Advertising is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with FinVolution and Lamar Advertising

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

The idea behind FinVolution Group and Lamar Advertising 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 CEOs Directory module to screen CEOs from public companies around the world.