Correlation Between 9F and Banxa Holdings

Can any of the company-specific risk be diversified away by investing in both 9F and Banxa Holdings 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 9F and Banxa Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 9F Inc and Banxa Holdings, you can compare the effects of market volatilities on 9F and Banxa Holdings 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 9F with a short position of Banxa Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of 9F and Banxa Holdings.

Diversification Opportunities for 9F and Banxa Holdings

-0.66

Correlation Coefficient

9F  Banxa Holdings

Excellent diversification

The 3 months correlation between 9F and Banxa is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding 9F Inc and Banxa Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banxa Holdings and 9F 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 9F Inc are associated (or correlated) with Banxa Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banxa Holdings has no effect on the direction of 9F i.e., 9F and Banxa Holdings go up and down completely randomly.

Pair Corralation between 9F and Banxa Holdings

Considering the 90-day investment horizon 9F is expected to generate 3.73 times less return on investment than Banxa Holdings. In addition to that, 9F is 1.32 times more volatile than Banxa Holdings. It trades about 0.04 of its total potential returns per unit of risk. Banxa Holdings is currently generating about 0.19 per unit of volatility. If you would invest  65.00  in Banxa Holdings on October 21, 2024 and sell it today you would earn a total of  5.00  from holding Banxa Holdings or generate 7.69% return on investment over 90 days.

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

9F Inc  vs.  Banxa Holdings

9F Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 9F Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, 9F is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Banxa Holdings

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Banxa Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Banxa Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 9F and Banxa Holdings

The main advantage of trading using opposite 9F and Banxa Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 9F position performs unexpectedly, Banxa Holdings 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 Banxa Holdings will offset losses from the drop in Banxa Holdings' long position.

The idea behind 9F Inc and Banxa Holdings 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.