Correlation Between 360 Finance and Cargile Fund

Can any of the company-specific risk be diversified away by investing in both 360 Finance and Cargile Fund 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 360 Finance and Cargile Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 360 Finance and Cargile Fund, you can compare the effects of market volatilities on 360 Finance and Cargile Fund 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 360 Finance with a short position of Cargile Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of 360 Finance and Cargile Fund.

Diversification Opportunities for 360 Finance and Cargile Fund

0.4

Correlation Coefficient

360 Finance  Cargile Fund

Very weak diversification

The 3 months correlation between 360 and Cargile is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding 360 Finance and Cargile Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cargile Fund and 360 Finance 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 360 Finance are associated (or correlated) with Cargile Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cargile Fund has no effect on the direction of 360 Finance i.e., 360 Finance and Cargile Fund go up and down completely randomly.

Pair Corralation between 360 Finance and Cargile Fund

Given the investment horizon of 90 days 360 Finance is expected to generate 5.13 times more return on investment than Cargile Fund. However, 360 Finance is 5.13 times more volatile than Cargile Fund. It trades about 0.06 of its potential returns per unit of risk. Cargile Fund is currently generating about 0.01 per unit of risk. If you would invest  2,091  in 360 Finance on October 4, 2024 and sell it today you would earn a total of  1,762  from holding 360 Finance or generate 84.29% return on investment over 90 days.

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

360 Finance  vs.  Cargile Fund

360 Finance

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in 360 Finance are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, 360 Finance displayed solid returns over the last few months and may actually be approaching a breakup point.

Cargile Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cargile Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Cargile Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with 360 Finance and Cargile Fund

The main advantage of trading using opposite 360 Finance and Cargile Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 360 Finance position performs unexpectedly, Cargile Fund 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 Cargile Fund will offset losses from the drop in Cargile Fund's long position.

The idea behind 360 Finance and Cargile Fund 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.