Correlation Between Oneconnect Financial and Alight
Can any of the company-specific risk be diversified away by investing in both Oneconnect Financial and Alight 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 Oneconnect Financial and Alight into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oneconnect Financial Technology and Alight Inc, you can compare the effects of market volatilities on Oneconnect Financial and Alight 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 Oneconnect Financial with a short position of Alight. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oneconnect Financial and Alight.
Diversification Opportunities for Oneconnect Financial and Alight
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Oneconnect and Alight is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Oneconnect Financial Technolog and Alight Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alight Inc and Oneconnect Financial 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 Oneconnect Financial Technology are associated (or correlated) with Alight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alight Inc has no effect on the direction of Oneconnect Financial i.e., Oneconnect Financial and Alight go up and down completely randomly.
Pair Corralation between Oneconnect Financial and Alight
Given the investment horizon of 90 days Oneconnect Financial Technology is expected to generate 2.86 times more return on investment than Alight. However, Oneconnect Financial is 2.86 times more volatile than Alight Inc. It trades about 0.01 of its potential returns per unit of risk. Alight Inc is currently generating about 0.02 per unit of risk. If you would invest 314.00 in Oneconnect Financial Technology on August 26, 2024 and sell it today you would lose (83.00) from holding Oneconnect Financial Technology or give up 26.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oneconnect Financial Technolog vs. Alight Inc
Performance |
| Timeline |
| Oneconnect Financial |
| Alight Inc |
Oneconnect Financial and Alight Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oneconnect Financial and Alight
The main advantage of trading using opposite Oneconnect Financial and Alight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oneconnect Financial position performs unexpectedly, Alight 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 Alight will offset losses from the drop in Alight's long position.| Oneconnect Financial vs. OLB Group | Oneconnect Financial vs. Friendable | Oneconnect Financial vs. KwikClick |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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