Correlation Between FinVolution and Invesco Us

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

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

Diversification Opportunities for FinVolution and Invesco Us

0.82

Correlation Coefficient

FinVolution  Invesco Us

Very poor diversification

The 3 months correlation between FinVolution and Invesco is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding FinVolution Group and Invesco Government Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Government 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 Invesco Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Government has no effect on the direction of FinVolution i.e., FinVolution and Invesco Us go up and down completely randomly.

Pair Corralation between FinVolution and Invesco Us

Given the investment horizon of 90 days FinVolution Group is expected to generate 7.91 times more return on investment than Invesco Us. However, FinVolution is 7.91 times more volatile than Invesco Government Fund. It trades about 0.09 of its potential returns per unit of risk. Invesco Government Fund is currently generating about 0.09 per unit of risk. If you would invest  345.00  in FinVolution Group on October 5, 2024 and sell it today you would earn a total of  333.00  from holding FinVolution Group or generate 96.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.78%
Values	Daily Returns

FinVolution Group  vs.  Invesco Government Fund

FinVolution Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FinVolution Group are ranked lower than 1 (%) 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.

Invesco Government

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Government Fund are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Invesco Us is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with FinVolution and Invesco Us

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

The idea behind FinVolution Group and Invesco Government Fund 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.