Correlation Between FINCORP INVESTMENT and CIM FINANCIAL
Can any of the company-specific risk be diversified away by investing in both FINCORP INVESTMENT and CIM FINANCIAL 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 FINCORP INVESTMENT and CIM FINANCIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FINCORP INVESTMENT LTD and CIM FINANCIAL SERVICES, you can compare the effects of market volatilities on FINCORP INVESTMENT and CIM FINANCIAL 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 FINCORP INVESTMENT with a short position of CIM FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of FINCORP INVESTMENT and CIM FINANCIAL.
Diversification Opportunities for FINCORP INVESTMENT and CIM FINANCIAL
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FINCORP and CIM is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding FINCORP INVESTMENT LTD and CIM FINANCIAL SERVICES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIM FINANCIAL SERVICES and FINCORP INVESTMENT 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 FINCORP INVESTMENT LTD are associated (or correlated) with CIM FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIM FINANCIAL SERVICES has no effect on the direction of FINCORP INVESTMENT i.e., FINCORP INVESTMENT and CIM FINANCIAL go up and down completely randomly.
Pair Corralation between FINCORP INVESTMENT and CIM FINANCIAL
Assuming the 90 days trading horizon FINCORP INVESTMENT LTD is expected to generate 1.53 times more return on investment than CIM FINANCIAL. However, FINCORP INVESTMENT is 1.53 times more volatile than CIM FINANCIAL SERVICES. It trades about -0.08 of its potential returns per unit of risk. CIM FINANCIAL SERVICES is currently generating about -0.42 per unit of risk. If you would invest 1,775 in FINCORP INVESTMENT LTD on September 3, 2024 and sell it today you would lose (60.00) from holding FINCORP INVESTMENT LTD or give up 3.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FINCORP INVESTMENT LTD vs. CIM FINANCIAL SERVICES
Performance |
| Timeline |
| FINCORP INVESTMENT LTD |
| CIM FINANCIAL SERVICES |
FINCORP INVESTMENT and CIM FINANCIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FINCORP INVESTMENT and CIM FINANCIAL
The main advantage of trading using opposite FINCORP INVESTMENT and CIM FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FINCORP INVESTMENT position performs unexpectedly, CIM FINANCIAL 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 CIM FINANCIAL will offset losses from the drop in CIM FINANCIAL's long position.| FINCORP INVESTMENT vs. MCB GROUP LIMITED | FINCORP INVESTMENT vs. MUA LTD | FINCORP INVESTMENT vs. LOTTOTECH LTD | FINCORP INVESTMENT vs. LUX ISLAND RESORTS |
| CIM FINANCIAL vs. FINCORP INVESTMENT LTD | CIM FINANCIAL vs. MCB GROUP LIMITED | CIM FINANCIAL vs. MUA LTD | CIM FINANCIAL vs. LOTTOTECH LTD |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |