Correlation Between FinVolution and Penguen Gida

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

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

Diversification Opportunities for FinVolution and Penguen Gida

0.69

Correlation Coefficient

FinVolution  Penguen Gida

Poor diversification

The 3 months correlation between FinVolution and Penguen is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding FinVolution Group and Penguen Gida Sanayi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penguen Gida Sanayi 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 Penguen Gida. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penguen Gida Sanayi has no effect on the direction of FinVolution i.e., FinVolution and Penguen Gida go up and down completely randomly.

Pair Corralation between FinVolution and Penguen Gida

Given the investment horizon of 90 days FinVolution Group is expected to generate 0.9 times more return on investment than Penguen Gida. However, FinVolution Group is 1.11 times less risky than Penguen Gida. It trades about -0.03 of its potential returns per unit of risk. Penguen Gida Sanayi is currently generating about -0.06 per unit of risk. If you would invest  686.00  in FinVolution Group on October 4, 2024 and sell it today you would lose (7.00) from holding FinVolution Group or give up 1.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

FinVolution Group  vs.  Penguen Gida Sanayi

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 recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Penguen Gida Sanayi

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Penguen Gida Sanayi are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Penguen Gida demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FinVolution and Penguen Gida

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

The idea behind FinVolution Group and Penguen Gida Sanayi 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.