Correlation Between FinVolution and Palayan Resources

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

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

Diversification Opportunities for FinVolution and Palayan Resources

-0.69

Correlation Coefficient

FinVolution  Palayan Resources

Excellent diversification

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

Pair Corralation between FinVolution and Palayan Resources

If you would invest  688.00  in FinVolution Group on October 6, 2024 and sell it today you would earn a total of  3.00  from holding FinVolution Group or generate 0.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

FinVolution Group  vs.  Palayan Resources

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.

Palayan Resources

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Palayan Resources are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Palayan Resources displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FinVolution and Palayan Resources

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

The idea behind FinVolution Group and Palayan Resources 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.