Correlation Between Broad Capital and 360 Finance
Can any of the company-specific risk be diversified away by investing in both Broad Capital and 360 Finance 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 Broad Capital and 360 Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Broad Capital Acquisition and 360 Finance, you can compare the effects of market volatilities on Broad Capital and 360 Finance 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 Broad Capital with a short position of 360 Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broad Capital and 360 Finance.
Diversification Opportunities for Broad Capital and 360 Finance
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Broad and 360 is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Broad Capital Acquisition and 360 Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 360 Finance and Broad 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 Broad Capital Acquisition are associated (or correlated) with 360 Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 360 Finance has no effect on the direction of Broad Capital i.e., Broad Capital and 360 Finance go up and down completely randomly.
Pair Corralation between Broad Capital and 360 Finance
Assuming the 90 days horizon Broad Capital Acquisition is expected to under-perform the 360 Finance. But the stock apears to be less risky and, when comparing its historical volatility, Broad Capital Acquisition is 3.6 times less risky than 360 Finance. The stock trades about -0.13 of its potential returns per unit of risk. The 360 Finance is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,505 in 360 Finance on September 2, 2024 and sell it today you would earn a total of 1,306 from holding 360 Finance or generate 52.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Broad Capital Acquisition vs. 360 Finance
Performance |
| Timeline |
| Broad Capital Acquisition |
| 360 Finance |
Broad Capital and 360 Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Broad Capital and 360 Finance
The main advantage of trading using opposite Broad Capital and 360 Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broad Capital position performs unexpectedly, 360 Finance 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 360 Finance will offset losses from the drop in 360 Finance's long position.| Broad Capital vs. Visa Class A | Broad Capital vs. Diamond Hill Investment | Broad Capital vs. Distoken Acquisition | Broad Capital vs. Associated Capital Group |
| 360 Finance vs. Victorias Secret Co | 360 Finance vs. RCS MediaGroup SpA | 360 Finance vs. PVH Corp | 360 Finance vs. Citi Trends |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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