Correlation Between FinVolution and Stockland

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

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

Diversification Opportunities for FinVolution and Stockland

-0.29

Correlation Coefficient

FinVolution  Stockland

Very good diversification

The 3 months correlation between FinVolution and Stockland is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding FinVolution Group and Stockland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stockland 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 Stockland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stockland has no effect on the direction of FinVolution i.e., FinVolution and Stockland go up and down completely randomly.

Pair Corralation between FinVolution and Stockland

Given the investment horizon of 90 days FinVolution is expected to generate 1.05 times less return on investment than Stockland. In addition to that, FinVolution is 1.09 times more volatile than Stockland. It trades about 0.04 of its total potential returns per unit of risk. Stockland is currently generating about 0.05 per unit of volatility. If you would invest  199.00  in Stockland on October 4, 2024 and sell it today you would earn a total of  81.00  from holding Stockland or generate 40.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.0%
Values	Daily Returns

FinVolution Group  vs.  Stockland

FinVolution Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FinVolution Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, FinVolution is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Stockland

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stockland has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with FinVolution and Stockland

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

The idea behind FinVolution Group and Stockland 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.