Correlation Between 360 Finance and X Financial
Can any of the company-specific risk be diversified away by investing in both 360 Finance and X 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 360 Finance and X Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 360 Finance and X Financial Class, you can compare the effects of market volatilities on 360 Finance and X 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 360 Finance with a short position of X Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of 360 Finance and X Financial.
Diversification Opportunities for 360 Finance and X Financial
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 360 and XYF is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding 360 Finance and X Financial Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X Financial Class and 360 Finance 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 360 Finance are associated (or correlated) with X Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X Financial Class has no effect on the direction of 360 Finance i.e., 360 Finance and X Financial go up and down completely randomly.
Pair Corralation between 360 Finance and X Financial
Given the investment horizon of 90 days 360 Finance is expected to under-perform the X Financial. In addition to that, 360 Finance is 1.86 times more volatile than X Financial Class. It trades about -0.02 of its total potential returns per unit of risk. X Financial Class is currently generating about -0.03 per unit of volatility. If you would invest 662.00 in X Financial Class on August 28, 2024 and sell it today you would lose (12.00) from holding X Financial Class or give up 1.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
360 Finance vs. X Financial Class
Performance |
| Timeline |
| 360 Finance |
| X Financial Class |
360 Finance and X Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 360 Finance and X Financial
The main advantage of trading using opposite 360 Finance and X Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 360 Finance position performs unexpectedly, X 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 X Financial will offset losses from the drop in X Financial's long position.| 360 Finance vs. Marine Products | 360 Finance vs. Asure Software | 360 Finance vs. Marti Technologies | 360 Finance vs. Sonos Inc |
| X Financial vs. Orix Corp Ads | X Financial vs. FirstCash | X Financial vs. Medallion Financial Corp | X Financial vs. Oportun 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |