Correlation Between Peijia Medical and LOANDEPOT INC
Can any of the company-specific risk be diversified away by investing in both Peijia Medical and LOANDEPOT INC 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 Peijia Medical and LOANDEPOT INC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peijia Medical Limited and LOANDEPOT INC A, you can compare the effects of market volatilities on Peijia Medical and LOANDEPOT INC 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 Peijia Medical with a short position of LOANDEPOT INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peijia Medical and LOANDEPOT INC.
Diversification Opportunities for Peijia Medical and LOANDEPOT INC
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Peijia and LOANDEPOT is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Peijia Medical Limited and LOANDEPOT INC A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOANDEPOT INC A and Peijia Medical 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 Peijia Medical Limited are associated (or correlated) with LOANDEPOT INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOANDEPOT INC A has no effect on the direction of Peijia Medical i.e., Peijia Medical and LOANDEPOT INC go up and down completely randomly.
Pair Corralation between Peijia Medical and LOANDEPOT INC
Assuming the 90 days horizon Peijia Medical Limited is expected to under-perform the LOANDEPOT INC. But the stock apears to be less risky and, when comparing its historical volatility, Peijia Medical Limited is 1.78 times less risky than LOANDEPOT INC. The stock trades about -0.18 of its potential returns per unit of risk. The LOANDEPOT INC A is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 177.00 in LOANDEPOT INC A on November 7, 2024 and sell it today you would lose (17.00) from holding LOANDEPOT INC A or give up 9.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peijia Medical Limited vs. LOANDEPOT INC A
Performance |
| Timeline |
| Peijia Medical |
| LOANDEPOT INC A |
Peijia Medical and LOANDEPOT INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peijia Medical and LOANDEPOT INC
The main advantage of trading using opposite Peijia Medical and LOANDEPOT INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peijia Medical position performs unexpectedly, LOANDEPOT INC 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 LOANDEPOT INC will offset losses from the drop in LOANDEPOT INC's long position.| Peijia Medical vs. MINCO SILVER | Peijia Medical vs. Sekisui Chemical Co | Peijia Medical vs. Mitsui Chemicals | Peijia Medical vs. MAG SILVER |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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