Correlation Between 9F and Formula Systems

Can any of the company-specific risk be diversified away by investing in both 9F and Formula Systems 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 9F and Formula Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 9F Inc and Formula Systems 1985, you can compare the effects of market volatilities on 9F and Formula Systems 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 9F with a short position of Formula Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of 9F and Formula Systems.

Diversification Opportunities for 9F and Formula Systems

0.59

Correlation Coefficient

9F  Formula Systems

Very weak diversification

The 3 months correlation between 9F and Formula is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding 9F Inc and Formula Systems 1985 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formula Systems 1985 and 9F 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 9F Inc are associated (or correlated) with Formula Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formula Systems 1985 has no effect on the direction of 9F i.e., 9F and Formula Systems go up and down completely randomly.

Pair Corralation between 9F and Formula Systems

Considering the 90-day investment horizon 9F Inc is expected to generate 1.31 times more return on investment than Formula Systems. However, 9F is 1.31 times more volatile than Formula Systems 1985. It trades about 0.19 of its potential returns per unit of risk. Formula Systems 1985 is currently generating about 0.12 per unit of risk. If you would invest  134.00  in 9F Inc on May 28, 2025 and sell it today you would earn a total of  105.00  from holding 9F Inc or generate 78.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	85.48%
Values	Daily Returns

9F Inc  vs.  Formula Systems 1985

9F Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 9F Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, 9F unveiled solid returns over the last few months and may actually be approaching a breakup point.

Formula Systems 1985

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Formula Systems 1985 are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Formula Systems showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 9F and Formula Systems

The main advantage of trading using opposite 9F and Formula Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 9F position performs unexpectedly, Formula Systems 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 Formula Systems will offset losses from the drop in Formula Systems' long position.

The idea behind 9F Inc and Formula Systems 1985 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..