Correlation Between FinVolution and Coincheck Group

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

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

Diversification Opportunities for FinVolution and Coincheck Group

-0.7

Correlation Coefficient

FinVolution  Coincheck Group

Excellent diversification

The 3 months correlation between FinVolution and Coincheck is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding FinVolution Group and Coincheck Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coincheck Group NV 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 Coincheck Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coincheck Group NV has no effect on the direction of FinVolution i.e., FinVolution and Coincheck Group go up and down completely randomly.

Pair Corralation between FinVolution and Coincheck Group

Given the investment horizon of 90 days FinVolution Group is expected to generate 0.25 times more return on investment than Coincheck Group. However, FinVolution Group is 4.07 times less risky than Coincheck Group. It trades about 0.21 of its potential returns per unit of risk. Coincheck Group NV is currently generating about -0.04 per unit of risk. If you would invest  687.00  in FinVolution Group on December 22, 2024 and sell it today you would earn a total of  317.00  from holding FinVolution Group or generate 46.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

FinVolution Group  vs.  Coincheck Group NV

FinVolution Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in FinVolution Group are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, FinVolution showed solid returns over the last few months and may actually be approaching a breakup point.

Coincheck Group NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Coincheck Group NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's forward-looking signals remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with FinVolution and Coincheck Group

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

The idea behind FinVolution Group and Coincheck Group NV 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 Global Correlations module to find global opportunities by holding instruments from different markets.