Correlation Between FinVolution and Mdundo

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

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

Diversification Opportunities for FinVolution and Mdundo

-0.41

Correlation Coefficient

FinVolution  Mdundo

Very good diversification

The 3 months correlation between FinVolution and Mdundo is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding FinVolution Group and Mdundo Com As in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mdundo Com As 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 Mdundo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mdundo Com As has no effect on the direction of FinVolution i.e., FinVolution and Mdundo go up and down completely randomly.

Pair Corralation between FinVolution and Mdundo

Given the investment horizon of 90 days FinVolution Group is expected to generate 0.64 times more return on investment than Mdundo. However, FinVolution Group is 1.56 times less risky than Mdundo. It trades about 0.04 of its potential returns per unit of risk. Mdundo Com As is currently generating about 0.0 per unit of risk. If you would invest  496.00  in FinVolution Group on October 4, 2024 and sell it today you would earn a total of  175.00  from holding FinVolution Group or generate 35.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.19%
Values	Daily Returns

FinVolution Group  vs.  Mdundo Com As

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.

Mdundo Com As

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with FinVolution and Mdundo

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

The idea behind FinVolution Group and Mdundo Com As 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.