Correlation Between Sunlight Financial and X Financial
Can any of the company-specific risk be diversified away by investing in both Sunlight Financial 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 Sunlight Financial and X Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunlight Financial Holdings and X Financial Class, you can compare the effects of market volatilities on Sunlight Financial 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 Sunlight Financial with a short position of X Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunlight Financial and X Financial.
Diversification Opportunities for Sunlight Financial and X Financial
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sunlight and XYF is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Sunlight Financial Holdings 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 Sunlight 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 Sunlight Financial Holdings 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 Sunlight Financial i.e., Sunlight Financial and X Financial go up and down completely randomly.
Pair Corralation between Sunlight Financial and X Financial
Given the investment horizon of 90 days Sunlight Financial Holdings is expected to generate 1.35 times more return on investment than X Financial. However, Sunlight Financial is 1.35 times more volatile than X Financial Class. It trades about 0.12 of its potential returns per unit of risk. X Financial Class is currently generating about 0.08 per unit of risk. If you would invest 41.00 in Sunlight Financial Holdings on August 31, 2024 and sell it today you would earn a total of 6.00 from holding Sunlight Financial Holdings or generate 14.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 8.56% |
| Values | Daily Returns |
Sunlight Financial Holdings vs. X Financial Class
Performance |
| Timeline |
| Sunlight Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| X Financial Class |
Sunlight Financial and X Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunlight Financial and X Financial
The main advantage of trading using opposite Sunlight Financial and X Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunlight Financial 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.| Sunlight Financial vs. X Financial Class | Sunlight Financial vs. LM Funding America | Sunlight Financial vs. Nisun International Enterprise | Sunlight Financial vs. Sentage Holdings |
| X Financial vs. LM Funding America | X Financial vs. Nisun International Enterprise | X Financial vs. Qudian Inc | X Financial vs. FinVolution Group |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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