Correlation Between Doximity and Open Lending
Can any of the company-specific risk be diversified away by investing in both Doximity and Open Lending 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 Doximity and Open Lending into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Doximity and Open Lending Corp, you can compare the effects of market volatilities on Doximity and Open Lending 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 Doximity with a short position of Open Lending. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doximity and Open Lending.
Diversification Opportunities for Doximity and Open Lending
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Doximity and Open is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Doximity and Open Lending Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Open Lending Corp and Doximity 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 Doximity are associated (or correlated) with Open Lending. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Open Lending Corp has no effect on the direction of Doximity i.e., Doximity and Open Lending go up and down completely randomly.
Pair Corralation between Doximity and Open Lending
Given the investment horizon of 90 days Doximity is expected to generate 1.29 times more return on investment than Open Lending. However, Doximity is 1.29 times more volatile than Open Lending Corp. It trades about 0.09 of its potential returns per unit of risk. Open Lending Corp is currently generating about 0.01 per unit of risk. If you would invest 2,418 in Doximity on August 24, 2024 and sell it today you would earn a total of 2,383 from holding Doximity or generate 98.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Doximity vs. Open Lending Corp
Performance |
| Timeline |
| Doximity |
| Open Lending Corp |
Doximity and Open Lending Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Doximity and Open Lending
The main advantage of trading using opposite Doximity and Open Lending positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Doximity position performs unexpectedly, Open Lending 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 Open Lending will offset losses from the drop in Open Lending's long position.The idea behind Doximity and Open Lending Corp 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.| Open Lending vs. EZCORP Inc | Open Lending vs. Orix Corp Ads | Open Lending vs. SLM Corp | Open Lending vs. Navient Corp |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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