Correlation Between FinVolution and Teb Bancorp

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

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

Diversification Opportunities for FinVolution and Teb Bancorp

0.41

Correlation Coefficient

FinVolution  Teb Bancorp

Very weak diversification

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

Pair Corralation between FinVolution and Teb Bancorp

Given the investment horizon of 90 days FinVolution Group is expected to generate 0.44 times more return on investment than Teb Bancorp. However, FinVolution Group is 2.26 times less risky than Teb Bancorp. It trades about 0.04 of its potential returns per unit of risk. Teb Bancorp 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	Weak
Accuracy	99.8%
Values	Daily Returns

FinVolution Group  vs.  Teb Bancorp

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.

Teb Bancorp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Teb Bancorp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Teb Bancorp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with FinVolution and Teb Bancorp

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

The idea behind FinVolution Group and Teb Bancorp 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.