Correlation Between StoneCo and Oneconnect Financial
Can any of the company-specific risk be diversified away by investing in both StoneCo and Oneconnect 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 StoneCo and Oneconnect Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between StoneCo and Oneconnect Financial Technology, you can compare the effects of market volatilities on StoneCo and Oneconnect 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 StoneCo with a short position of Oneconnect Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of StoneCo and Oneconnect Financial.
Diversification Opportunities for StoneCo and Oneconnect Financial
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between StoneCo and Oneconnect is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding StoneCo and Oneconnect Financial Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oneconnect Financial and StoneCo 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 StoneCo are associated (or correlated) with Oneconnect Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oneconnect Financial has no effect on the direction of StoneCo i.e., StoneCo and Oneconnect Financial go up and down completely randomly.
Pair Corralation between StoneCo and Oneconnect Financial
Given the investment horizon of 90 days StoneCo is expected to under-perform the Oneconnect Financial. But the stock apears to be less risky and, when comparing its historical volatility, StoneCo is 2.66 times less risky than Oneconnect Financial. The stock trades about -0.01 of its potential returns per unit of risk. The Oneconnect Financial Technology is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 350.00 in Oneconnect Financial Technology on August 27, 2024 and sell it today you would lose (119.00) from holding Oneconnect Financial Technology or give up 34.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
StoneCo vs. Oneconnect Financial Technolog
Performance |
| Timeline |
| StoneCo |
| Oneconnect Financial |
StoneCo and Oneconnect Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with StoneCo and Oneconnect Financial
The main advantage of trading using opposite StoneCo and Oneconnect Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if StoneCo position performs unexpectedly, Oneconnect 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 Oneconnect Financial will offset losses from the drop in Oneconnect Financial's long position.| StoneCo vs. Oneconnect Financial Technology | StoneCo vs. Global Business Travel | StoneCo vs. Alight Inc | StoneCo vs. CS Disco LLC |
| Oneconnect Financial vs. Trust Stamp | Oneconnect Financial vs. Amesite Operating Co | Oneconnect Financial vs. My Size | Oneconnect Financial vs. Kingsoft Cloud 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 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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