Correlation Between FINCORP INVESTMENT and RHT HOLDING

Can any of the company-specific risk be diversified away by investing in both FINCORP INVESTMENT and RHT HOLDING 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 FINCORP INVESTMENT and RHT HOLDING into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FINCORP INVESTMENT LTD and RHT HOLDING LTD, you can compare the effects of market volatilities on FINCORP INVESTMENT and RHT HOLDING 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 FINCORP INVESTMENT with a short position of RHT HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of FINCORP INVESTMENT and RHT HOLDING.

Diversification Opportunities for FINCORP INVESTMENT and RHT HOLDING

-0.24

Correlation Coefficient

FINCORP INVESTMENT  RHT HOLDING

Very good diversification

The 3 months correlation between FINCORP and RHT is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding FINCORP INVESTMENT LTD and RHT HOLDING LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RHT HOLDING LTD and FINCORP INVESTMENT 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 FINCORP INVESTMENT LTD are associated (or correlated) with RHT HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RHT HOLDING LTD has no effect on the direction of FINCORP INVESTMENT i.e., FINCORP INVESTMENT and RHT HOLDING go up and down completely randomly.

Pair Corralation between FINCORP INVESTMENT and RHT HOLDING

Assuming the 90 days trading horizon FINCORP INVESTMENT LTD is expected to generate 4.81 times more return on investment than RHT HOLDING. However, FINCORP INVESTMENT is 4.81 times more volatile than RHT HOLDING LTD. It trades about 0.02 of its potential returns per unit of risk. RHT HOLDING LTD is currently generating about -0.13 per unit of risk. If you would invest  1,895  in FINCORP INVESTMENT LTD on April 22, 2025 and sell it today you would earn a total of  30.00  from holding FINCORP INVESTMENT LTD or generate 1.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

FINCORP INVESTMENT LTD  vs.  RHT HOLDING LTD

FINCORP INVESTMENT LTD

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FINCORP INVESTMENT LTD are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, FINCORP INVESTMENT is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

RHT HOLDING LTD

Risk-Adjusted Performance

Very Weak

Over the last 90 days RHT HOLDING LTD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, RHT HOLDING is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with FINCORP INVESTMENT and RHT HOLDING

The main advantage of trading using opposite FINCORP INVESTMENT and RHT HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FINCORP INVESTMENT position performs unexpectedly, RHT HOLDING 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 RHT HOLDING will offset losses from the drop in RHT HOLDING's long position.

The idea behind FINCORP INVESTMENT LTD and RHT HOLDING LTD pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.