Correlation Between FinVolution and 360 Finance
Can any of the company-specific risk be diversified away by investing in both FinVolution 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 FinVolution and 360 Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FinVolution Group and 360 Finance, you can compare the effects of market volatilities on FinVolution 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 FinVolution with a short position of 360 Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of FinVolution and 360 Finance.
Diversification Opportunities for FinVolution and 360 Finance
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FinVolution and 360 is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding FinVolution Group and 360 Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 360 Finance and FinVolution 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 FinVolution Group 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 FinVolution i.e., FinVolution and 360 Finance go up and down completely randomly.
Pair Corralation between FinVolution and 360 Finance
Given the investment horizon of 90 days FinVolution is expected to generate 2.54 times less return on investment than 360 Finance. But when comparing it to its historical volatility, FinVolution Group is 1.49 times less risky than 360 Finance. It trades about 0.03 of its potential returns per unit of risk. 360 Finance is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,005 in 360 Finance on August 27, 2024 and sell it today you would earn a total of 1,448 from holding 360 Finance or generate 72.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
FinVolution Group vs. 360 Finance
Performance |
| Timeline |
| FinVolution Group |
| 360 Finance |
FinVolution and 360 Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FinVolution and 360 Finance
The main advantage of trading using opposite FinVolution and 360 Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FinVolution 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.| FinVolution vs. SLM Corp | FinVolution vs. Orix Corp Ads | FinVolution vs. FirstCash | FinVolution vs. Medallion Financial Corp |
| 360 Finance vs. SLM Corp | 360 Finance vs. Orix Corp Ads | 360 Finance vs. FirstCash | 360 Finance vs. Medallion Financial Corp |
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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