Correlation Between Capital One and FinVolution

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

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

Diversification Opportunities for Capital One and FinVolution

0.81

Correlation Coefficient

Capital One  FinVolution

Very poor diversification

The 3 months correlation between Capital and FinVolution is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Capital One Financial and FinVolution Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FinVolution Group and Capital One 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 Capital One Financial 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 Capital One i.e., Capital One and FinVolution go up and down completely randomly.

Pair Corralation between Capital One and FinVolution

Considering the 90-day investment horizon Capital One Financial is expected to generate 0.73 times more return on investment than FinVolution. However, Capital One Financial is 1.38 times less risky than FinVolution. It trades about 0.1 of its potential returns per unit of risk. FinVolution Group is currently generating about 0.0 per unit of risk. If you would invest  18,730  in Capital One Financial on May 5, 2025 and sell it today you would earn a total of  2,017  from holding Capital One Financial or generate 10.77% return on investment over 90 days.

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

Capital One Financial  vs.  FinVolution Group

Capital One Financial

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Capital One Financial are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Capital One may actually be approaching a critical reversion point that can send shares even higher in September 2025.

FinVolution Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days FinVolution Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, FinVolution is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Capital One and FinVolution

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

The idea behind Capital One Financial and FinVolution Group 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.