Correlation Between Associated Capital and FinVolution
Can any of the company-specific risk be diversified away by investing in both Associated Capital 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 Associated Capital and FinVolution into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Capital Group and FinVolution Group, you can compare the effects of market volatilities on Associated Capital 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 Associated Capital with a short position of FinVolution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and FinVolution.
Diversification Opportunities for Associated Capital and FinVolution
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Associated and FinVolution is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and FinVolution Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FinVolution Group and Associated Capital 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 Associated Capital Group 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 Associated Capital i.e., Associated Capital and FinVolution go up and down completely randomly.
Pair Corralation between Associated Capital and FinVolution
Allowing for the 90-day total investment horizon Associated Capital is expected to generate 1.32 times less return on investment than FinVolution. But when comparing it to its historical volatility, Associated Capital Group is 2.0 times less risky than FinVolution. It trades about 0.15 of its potential returns per unit of risk. FinVolution Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 604.00 in FinVolution Group on August 24, 2024 and sell it today you would earn a total of 25.00 from holding FinVolution Group or generate 4.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated Capital Group vs. FinVolution Group
Performance |
| Timeline |
| Associated Capital |
| FinVolution Group |
Associated Capital and FinVolution Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Capital and FinVolution
The main advantage of trading using opposite Associated Capital and FinVolution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital 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.| Associated Capital vs. Abrdn Emerging Markets | Associated Capital vs. DWS Municipal Income | Associated Capital vs. Blackrock Muni Intermediate | Associated Capital vs. Blackrock Muniyield |
| FinVolution vs. 360 Finance | FinVolution vs. Lufax Holding | FinVolution vs. Qudian Inc | FinVolution vs. X Financial Class |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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