Correlation Between Infobird and Oneconnect Financial

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

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

Diversification Opportunities for Infobird and Oneconnect Financial

0.5

Correlation Coefficient

Infobird  Oneconnect Financial

Very weak diversification

The 3 months correlation between Infobird and Oneconnect is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Infobird Co and Oneconnect Financial Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oneconnect Financial and Infobird 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 Infobird Co are associated (or correlated) with Oneconnect Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oneconnect Financial has no effect on the direction of Infobird i.e., Infobird and Oneconnect Financial go up and down completely randomly.

Pair Corralation between Infobird and Oneconnect Financial

Given the investment horizon of 90 days Infobird is expected to generate 1.33 times less return on investment than Oneconnect Financial. But when comparing it to its historical volatility, Infobird Co is 1.57 times less risky than Oneconnect Financial. It trades about 0.16 of its potential returns per unit of risk. Oneconnect Financial Technology is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  130.00  in Oneconnect Financial Technology on September 2, 2024 and sell it today you would earn a total of  120.00  from holding Oneconnect Financial Technology or generate 92.31% return on investment over 90 days.

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

Infobird Co  vs.  Oneconnect Financial Technolog

Infobird

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Infobird Co are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental drivers, Infobird exhibited solid returns over the last few months and may actually be approaching a breakup point.

Oneconnect Financial

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Oneconnect Financial Technology are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Oneconnect Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Infobird and Oneconnect Financial

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

The idea behind Infobird Co and Oneconnect Financial Technology 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.