Correlation Between FinVolution and Zions Bancorporation

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

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

Diversification Opportunities for FinVolution and Zions Bancorporation

0.55

Correlation Coefficient

FinVolution  Zions Bancorporation

Very weak diversification

The 3 months correlation between FinVolution and Zions is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding FinVolution Group and Zions Bancorp. National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zions Bancorporation 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 Zions Bancorporation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zions Bancorporation has no effect on the direction of FinVolution i.e., FinVolution and Zions Bancorporation go up and down completely randomly.

Pair Corralation between FinVolution and Zions Bancorporation

Given the investment horizon of 90 days FinVolution Group is expected to generate 1.08 times more return on investment than Zions Bancorporation. However, FinVolution is 1.08 times more volatile than Zions Bancorporation National. It trades about 0.04 of its potential returns per unit of risk. Zions Bancorporation National is currently generating about 0.04 per unit of risk. If you would invest  506.00  in FinVolution Group on October 5, 2024 and sell it today you would earn a total of  172.00  from holding FinVolution Group or generate 33.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.79%
Values	Daily Returns

FinVolution Group  vs.  Zions Bancorp. National

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.

Zions Bancorporation

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zions Bancorporation National are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Zions Bancorporation may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with FinVolution and Zions Bancorporation

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

The idea behind FinVolution Group and Zions Bancorporation National 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.