Correlation Between FinVolution and Visa
Can any of the company-specific risk be diversified away by investing in both FinVolution and Visa 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 Visa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FinVolution Group and Visa Class A, you can compare the effects of market volatilities on FinVolution and Visa 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 Visa. Check out your portfolio center. Please also check ongoing floating volatility patterns of FinVolution and Visa.
Diversification Opportunities for FinVolution and Visa
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FinVolution and Visa is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding FinVolution Group and Visa Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visa Class A 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 Visa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visa Class A has no effect on the direction of FinVolution i.e., FinVolution and Visa go up and down completely randomly.
Pair Corralation between FinVolution and Visa
Given the investment horizon of 90 days FinVolution Group is expected to generate 2.06 times more return on investment than Visa. However, FinVolution is 2.06 times more volatile than Visa Class A. It trades about 0.18 of its potential returns per unit of risk. Visa Class A is currently generating about 0.16 per unit of risk. If you would invest 526.00 in FinVolution Group on September 2, 2024 and sell it today you would earn a total of 172.00 from holding FinVolution Group or generate 32.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FinVolution Group vs. Visa Class A
Performance |
| Timeline |
| FinVolution Group |
| Visa Class A |
FinVolution and Visa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FinVolution and Visa
The main advantage of trading using opposite FinVolution and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FinVolution position performs unexpectedly, Visa 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 Visa will offset losses from the drop in Visa's long position.| FinVolution vs. 360 Finance | FinVolution vs. Lufax Holding | FinVolution vs. Qudian Inc | FinVolution vs. X Financial Class |
| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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