Correlation Between FinVolution and Global X
Can any of the company-specific risk be diversified away by investing in both FinVolution and Global X 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 Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FinVolution Group and Global X USD, you can compare the effects of market volatilities on FinVolution and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of FinVolution and Global X.
Diversification Opportunities for FinVolution and Global X
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FinVolution and Global is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding FinVolution Group and Global X USD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X USD 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X USD has no effect on the direction of FinVolution i.e., FinVolution and Global X go up and down completely randomly.
Pair Corralation between FinVolution and Global X
Given the investment horizon of 90 days FinVolution Group is expected to generate 29.4 times more return on investment than Global X. However, FinVolution is 29.4 times more volatile than Global X USD. It trades about 0.1 of its potential returns per unit of risk. Global X USD is currently generating about 0.24 per unit of risk. If you would invest 628.00 in FinVolution Group on October 22, 2024 and sell it today you would earn a total of 74.00 from holding FinVolution Group or generate 11.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 98.39% |
Values | Daily Returns |
FinVolution Group vs. Global X USD
Performance |
Timeline |
FinVolution Group |
Global X USD |
FinVolution and Global X Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FinVolution and Global X
The main advantage of trading using opposite FinVolution and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FinVolution position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.FinVolution vs. 360 Finance | FinVolution vs. Lufax Holding | FinVolution vs. Qudian Inc | FinVolution vs. X Financial Class |
Global X vs. Global X Equal | Global X vs. Global X Enhanced | Global X vs. Global X Gold | Global X vs. Global X Canadian |
Check out your portfolio center.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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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