Correlation Between FinVolution and Growth Income

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

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

Diversification Opportunities for FinVolution and Growth Income

-0.41

Correlation Coefficient

FinVolution  Growth Income

Very good diversification

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

Pair Corralation between FinVolution and Growth Income

Given the investment horizon of 90 days FinVolution Group is expected to generate 1.59 times more return on investment than Growth Income. However, FinVolution is 1.59 times more volatile than Growth Income Fund. It trades about 0.09 of its potential returns per unit of risk. Growth Income Fund is currently generating about 0.01 per unit of risk. If you would invest  452.00  in FinVolution Group on October 5, 2024 and sell it today you would earn a total of  227.00  from holding FinVolution Group or generate 50.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

FinVolution Group  vs.  Growth Income Fund

FinVolution Group

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FinVolution Group are ranked lower than 1 (%) 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.

Growth Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Growth Income Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with FinVolution and Growth Income

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

The idea behind FinVolution Group and Growth Income Fund 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.