Correlation Between Nisun International and FinVolution

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

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

Diversification Opportunities for Nisun International and FinVolution

0.66

Correlation Coefficient

Nisun International  FinVolution

Poor diversification

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

Pair Corralation between Nisun International and FinVolution

Given the investment horizon of 90 days Nisun International is expected to generate 2.6 times less return on investment than FinVolution. In addition to that, Nisun International is 1.62 times more volatile than FinVolution Group. It trades about 0.04 of its total potential returns per unit of risk. FinVolution Group is currently generating about 0.19 per unit of volatility. If you would invest  680.00  in FinVolution Group on December 30, 2024 and sell it today you would earn a total of  296.00  from holding FinVolution Group or generate 43.53% return on investment over 90 days.

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

Nisun International Enterprise  vs.  FinVolution Group

Nisun International

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nisun International Enterprise are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Nisun International displayed solid returns over the last few months and may actually be approaching a breakup point.

FinVolution Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FinVolution Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, FinVolution showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nisun International and FinVolution

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

The idea behind Nisun International Enterprise and FinVolution Group 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.