Correlation Between Futu Holdings and Up Fintech
Can any of the company-specific risk be diversified away by investing in both Futu Holdings and Up Fintech 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 Futu Holdings and Up Fintech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Futu Holdings and Up Fintech Holding, you can compare the effects of market volatilities on Futu Holdings and Up Fintech 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 Futu Holdings with a short position of Up Fintech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Futu Holdings and Up Fintech.
Diversification Opportunities for Futu Holdings and Up Fintech
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Futu and TIGR is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Futu Holdings and Up Fintech Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Up Fintech Holding and Futu Holdings 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 Futu Holdings are associated (or correlated) with Up Fintech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Up Fintech Holding has no effect on the direction of Futu Holdings i.e., Futu Holdings and Up Fintech go up and down completely randomly.
Pair Corralation between Futu Holdings and Up Fintech
Given the investment horizon of 90 days Futu Holdings is expected to generate 2.23 times less return on investment than Up Fintech. But when comparing it to its historical volatility, Futu Holdings is 1.56 times less risky than Up Fintech. It trades about 0.05 of its potential returns per unit of risk. Up Fintech Holding is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 422.00 in Up Fintech Holding on September 3, 2024 and sell it today you would earn a total of 157.00 from holding Up Fintech Holding or generate 37.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Futu Holdings vs. Up Fintech Holding
Performance |
| Timeline |
| Futu Holdings |
| Up Fintech Holding |
Futu Holdings and Up Fintech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Futu Holdings and Up Fintech
The main advantage of trading using opposite Futu Holdings and Up Fintech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Futu Holdings position performs unexpectedly, Up Fintech 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 Up Fintech will offset losses from the drop in Up Fintech's long position.| Futu Holdings vs. Riot Blockchain | Futu Holdings vs. Marathon Digital Holdings | Futu Holdings vs. Applied Blockchain | Futu Holdings vs. Hut 8 Corp |
| Up Fintech vs. Riot Blockchain | Up Fintech vs. Marathon Digital Holdings | Up Fintech vs. Applied Blockchain | Up Fintech vs. Hut 8 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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