Correlation Between Federal Agricultural and FinVolution
Can any of the company-specific risk be diversified away by investing in both Federal Agricultural and FinVolution 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 Federal Agricultural and FinVolution into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federal Agricultural Mortgage and FinVolution Group, you can compare the effects of market volatilities on Federal Agricultural and FinVolution 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 Federal Agricultural with a short position of FinVolution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Agricultural and FinVolution.
Diversification Opportunities for Federal Agricultural and FinVolution
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Federal and FinVolution is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Federal Agricultural Mortgage and FinVolution Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FinVolution Group and Federal Agricultural 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 Federal Agricultural Mortgage are associated (or correlated) with FinVolution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FinVolution Group has no effect on the direction of Federal Agricultural i.e., Federal Agricultural and FinVolution go up and down completely randomly.
Pair Corralation between Federal Agricultural and FinVolution
Considering the 90-day investment horizon Federal Agricultural Mortgage is expected to generate 0.61 times more return on investment than FinVolution. However, Federal Agricultural Mortgage is 1.64 times less risky than FinVolution. It trades about -0.09 of its potential returns per unit of risk. FinVolution Group is currently generating about -0.22 per unit of risk. If you would invest 18,706 in Federal Agricultural Mortgage on August 15, 2025 and sell it today you would lose (2,002) from holding Federal Agricultural Mortgage or give up 10.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federal Agricultural Mortgage vs. FinVolution Group
Performance |
| Timeline |
| Federal Agricultural |
| FinVolution Group |
Federal Agricultural and FinVolution Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Agricultural and FinVolution
The main advantage of trading using opposite Federal Agricultural and FinVolution positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Agricultural position performs unexpectedly, FinVolution 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 FinVolution will offset losses from the drop in FinVolution's long position.| Federal Agricultural vs. FinVolution Group | Federal Agricultural vs. 360 Finance | Federal Agricultural vs. OFG Bancorp | Federal Agricultural vs. City Holding |
| FinVolution vs. 360 Finance | FinVolution vs. Lufax Holding | FinVolution vs. Qudian Inc | FinVolution vs. X Financial Class |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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