Correlation Between Finexia Financial and Inventis

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

By analyzing existing cross correlation between Finexia Financial Group and Inventis, you can compare the effects of market volatilities on Finexia Financial and Inventis 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 Finexia Financial with a short position of Inventis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finexia Financial and Inventis.

Diversification Opportunities for Finexia Financial and Inventis

-0.14

Correlation Coefficient

Finexia Financial  Inventis

Good diversification

The 3 months correlation between Finexia and Inventis is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Finexia Financial Group and Inventis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inventis and Finexia Financial 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 Finexia Financial Group are associated (or correlated) with Inventis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inventis has no effect on the direction of Finexia Financial i.e., Finexia Financial and Inventis go up and down completely randomly.

Pair Corralation between Finexia Financial and Inventis

Assuming the 90 days trading horizon Finexia Financial Group is expected to generate 2.07 times more return on investment than Inventis. However, Finexia Financial is 2.07 times more volatile than Inventis. It trades about 0.01 of its potential returns per unit of risk. Inventis is currently generating about -0.08 per unit of risk. If you would invest  36.00  in Finexia Financial Group on October 22, 2024 and sell it today you would lose (7.00) from holding Finexia Financial Group or give up 19.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Finexia Financial Group  vs.  Inventis

Finexia Financial

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Finexia Financial Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Finexia Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

Inventis

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inventis has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Inventis is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Finexia Financial and Inventis

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

The idea behind Finexia Financial Group and Inventis 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.