Correlation Between Oneconnect Financial and Sprout Social

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

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

Diversification Opportunities for Oneconnect Financial and Sprout Social

-0.93

Correlation Coefficient

Oneconnect Financial  Sprout Social

Pay attention - limited upside

The 3 months correlation between Oneconnect and Sprout is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Oneconnect Financial Technolog and Sprout Social in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprout Social and Oneconnect 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 Oneconnect Financial Technology are associated (or correlated) with Sprout Social. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprout Social has no effect on the direction of Oneconnect Financial i.e., Oneconnect Financial and Sprout Social go up and down completely randomly.

Pair Corralation between Oneconnect Financial and Sprout Social

Given the investment horizon of 90 days Oneconnect Financial Technology is expected to generate 2.89 times more return on investment than Sprout Social. However, Oneconnect Financial is 2.89 times more volatile than Sprout Social. It trades about 0.27 of its potential returns per unit of risk. Sprout Social is currently generating about -0.22 per unit of risk. If you would invest  262.00  in Oneconnect Financial Technology on December 30, 2024 and sell it today you would earn a total of  418.00  from holding Oneconnect Financial Technology or generate 159.54% return on investment over 90 days.

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

Oneconnect Financial Technolog  vs.  Sprout Social

Oneconnect Financial

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Oneconnect Financial Technology are ranked lower than 20 (%) 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.

Sprout Social

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sprout Social has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Oneconnect Financial and Sprout Social

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

The idea behind Oneconnect Financial Technology and Sprout Social 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.