Correlation Between FinVolution and Nutritional Growth

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

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

Diversification Opportunities for FinVolution and Nutritional Growth

0.53

Correlation Coefficient

FinVolution  Nutritional Growth

Very weak diversification

The 3 months correlation between FinVolution and Nutritional is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding FinVolution Group and Nutritional Growth Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nutritional Growth 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 Nutritional Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nutritional Growth has no effect on the direction of FinVolution i.e., FinVolution and Nutritional Growth go up and down completely randomly.

Pair Corralation between FinVolution and Nutritional Growth

Given the investment horizon of 90 days FinVolution is expected to generate 624.48 times less return on investment than Nutritional Growth. But when comparing it to its historical volatility, FinVolution Group is 142.7 times less risky than Nutritional Growth. It trades about 0.07 of its potential returns per unit of risk. Nutritional Growth Solutions is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  19.00  in Nutritional Growth Solutions on October 5, 2024 and sell it today you would lose (14.50) from holding Nutritional Growth Solutions or give up 76.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	88.39%
Values	Daily Returns

FinVolution Group  vs.  Nutritional Growth Solutions

FinVolution Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FinVolution Group are ranked lower than 2 (%) 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.

Nutritional Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nutritional Growth Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Nutritional Growth is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with FinVolution and Nutritional Growth

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

The idea behind FinVolution Group and Nutritional Growth Solutions 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.