Correlation Between World Acceptance and 360 Finance
Can any of the company-specific risk be diversified away by investing in both World Acceptance and 360 Finance 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 World Acceptance and 360 Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between World Acceptance and 360 Finance, you can compare the effects of market volatilities on World Acceptance and 360 Finance 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 World Acceptance with a short position of 360 Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of World Acceptance and 360 Finance.
Diversification Opportunities for World Acceptance and 360 Finance
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between World and 360 is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding World Acceptance and 360 Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 360 Finance and World Acceptance 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 World Acceptance are associated (or correlated) with 360 Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 360 Finance has no effect on the direction of World Acceptance i.e., World Acceptance and 360 Finance go up and down completely randomly.
Pair Corralation between World Acceptance and 360 Finance
Given the investment horizon of 90 days World Acceptance is expected to generate 14.25 times less return on investment than 360 Finance. But when comparing it to its historical volatility, World Acceptance is 1.02 times less risky than 360 Finance. It trades about 0.01 of its potential returns per unit of risk. 360 Finance is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,404 in 360 Finance on September 3, 2024 and sell it today you would earn a total of 2,214 from holding 360 Finance or generate 157.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
World Acceptance vs. 360 Finance
Performance |
| Timeline |
| World Acceptance |
| 360 Finance |
World Acceptance and 360 Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with World Acceptance and 360 Finance
The main advantage of trading using opposite World Acceptance and 360 Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Acceptance position performs unexpectedly, 360 Finance 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 360 Finance will offset losses from the drop in 360 Finance's long position.| World Acceptance vs. Highway Holdings Limited | World Acceptance vs. QCR Holdings | World Acceptance vs. Partner Communications | World Acceptance vs. Acumen Pharmaceuticals |
| 360 Finance vs. Dine Brands Global | 360 Finance vs. Kaltura | 360 Finance vs. Senmiao Technology | 360 Finance vs. Sweetgreen |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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