Correlation Between FinVolution and GLOBUS MEDICAL

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

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

Diversification Opportunities for FinVolution and GLOBUS MEDICAL

0.57

Correlation Coefficient

FinVolution  GLOBUS MEDICAL

Very weak diversification

The 3 months correlation between FinVolution and GLOBUS is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding FinVolution Group and GLOBUS MEDICAL A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLOBUS MEDICAL A 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 GLOBUS MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLOBUS MEDICAL A has no effect on the direction of FinVolution i.e., FinVolution and GLOBUS MEDICAL go up and down completely randomly.

Pair Corralation between FinVolution and GLOBUS MEDICAL

Given the investment horizon of 90 days FinVolution Group is expected to generate 1.01 times more return on investment than GLOBUS MEDICAL. However, FinVolution is 1.01 times more volatile than GLOBUS MEDICAL A. It trades about 0.04 of its potential returns per unit of risk. GLOBUS MEDICAL A is currently generating about 0.02 per unit of risk. If you would invest  494.00  in FinVolution Group on October 5, 2024 and sell it today you would earn a total of  185.00  from holding FinVolution Group or generate 37.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.8%
Values	Daily Returns

FinVolution Group  vs.  GLOBUS MEDICAL A

FinVolution Group

Risk-Adjusted Performance

1 of 100

Very 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.

GLOBUS MEDICAL A

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days GLOBUS MEDICAL A has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather fragile technical and fundamental indicators, GLOBUS MEDICAL exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FinVolution and GLOBUS MEDICAL

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

The idea behind FinVolution Group and GLOBUS MEDICAL A 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.