Correlation Between FinVolution and TELECOM PLUS
Can any of the company-specific risk be diversified away by investing in both FinVolution and TELECOM PLUS 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 TELECOM PLUS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FinVolution Group and TELECOM PLUS PLC, you can compare the effects of market volatilities on FinVolution and TELECOM PLUS 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 TELECOM PLUS. Check out your portfolio center. Please also check ongoing floating volatility patterns of FinVolution and TELECOM PLUS.
Diversification Opportunities for FinVolution and TELECOM PLUS
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FinVolution and TELECOM is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding FinVolution Group and TELECOM PLUS PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TELECOM PLUS PLC 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 TELECOM PLUS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TELECOM PLUS PLC has no effect on the direction of FinVolution i.e., FinVolution and TELECOM PLUS go up and down completely randomly.
Pair Corralation between FinVolution and TELECOM PLUS
Given the investment horizon of 90 days FinVolution Group is expected to generate 0.7 times more return on investment than TELECOM PLUS. However, FinVolution Group is 1.42 times less risky than TELECOM PLUS. It trades about 0.04 of its potential returns per unit of risk. TELECOM PLUS PLC is currently generating about 0.01 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 Together |
Strength | Very Weak |
Accuracy | 99.0% |
Values | Daily Returns |
FinVolution Group vs. TELECOM PLUS PLC
Performance |
Timeline |
FinVolution Group |
TELECOM PLUS PLC |
FinVolution and TELECOM PLUS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FinVolution and TELECOM PLUS
The main advantage of trading using opposite FinVolution and TELECOM PLUS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FinVolution position performs unexpectedly, TELECOM PLUS 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 TELECOM PLUS will offset losses from the drop in TELECOM PLUS's long position.FinVolution vs. Visa Class A | FinVolution vs. Aquagold International | FinVolution vs. Thrivent High Yield | FinVolution vs. Morningstar Unconstrained Allocation |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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