Correlation Between Maximus and Oneconnect Financial

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

By analyzing existing cross correlation between Maximus and Oneconnect Financial Technology, you can compare the effects of market volatilities on Maximus 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 Maximus with a short position of Oneconnect Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maximus and Oneconnect Financial.

Diversification Opportunities for Maximus and Oneconnect Financial

-0.1

Correlation Coefficient

Maximus  Oneconnect Financial

Good diversification

The 3 months correlation between Maximus and Oneconnect is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Maximus and Oneconnect Financial Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oneconnect Financial and Maximus 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 Maximus 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 Maximus i.e., Maximus and Oneconnect Financial go up and down completely randomly.

Pair Corralation between Maximus and Oneconnect Financial

Considering the 90-day investment horizon Maximus is expected to under-perform the Oneconnect Financial. But the stock apears to be less risky and, when comparing its historical volatility, Maximus is 7.08 times less risky than Oneconnect Financial. The stock trades about -0.18 of its potential returns per unit of risk. The Oneconnect Financial Technology is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  119.00  in Oneconnect Financial Technology on September 18, 2024 and sell it today you would earn a total of  126.00  from holding Oneconnect Financial Technology or generate 105.88% return on investment over 90 days.

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

Maximus  vs.  Oneconnect Financial Technolog

Maximus

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maximus has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Oneconnect Financial

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Oneconnect Financial Technology are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Oneconnect Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Maximus and Oneconnect Financial

The main advantage of trading using opposite Maximus and Oneconnect Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maximus 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.

The idea behind Maximus and Oneconnect Financial Technology 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.