Correlation Between 360 Finance and SSE PLC
Can any of the company-specific risk be diversified away by investing in both 360 Finance and SSE PLC 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 SSE PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 360 Finance and SSE PLC ADR, you can compare the effects of market volatilities on 360 Finance and SSE PLC 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 SSE PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of 360 Finance and SSE PLC.
Diversification Opportunities for 360 Finance and SSE PLC
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 360 and SSE is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding 360 Finance and SSE PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSE PLC ADR 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 SSE PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSE PLC ADR has no effect on the direction of 360 Finance i.e., 360 Finance and SSE PLC go up and down completely randomly.
Pair Corralation between 360 Finance and SSE PLC
Given the investment horizon of 90 days 360 Finance is expected to generate 2.19 times more return on investment than SSE PLC. However, 360 Finance is 2.19 times more volatile than SSE PLC ADR. It trades about 0.06 of its potential returns per unit of risk. SSE PLC ADR is currently generating about 0.02 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 Against |
Strength | Very Weak |
Accuracy | 99.0% |
Values | Daily Returns |
360 Finance vs. SSE PLC ADR
Performance |
Timeline |
360 Finance |
SSE PLC ADR |
360 Finance and SSE PLC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with 360 Finance and SSE PLC
The main advantage of trading using opposite 360 Finance and SSE PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 360 Finance position performs unexpectedly, SSE PLC 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 SSE PLC will offset losses from the drop in SSE PLC's long position.360 Finance vs. Ryanair Holdings PLC | 360 Finance vs. Delta Air Lines | 360 Finance vs. Air Transport Services | 360 Finance vs. Allient |
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 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.
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