Correlation Between Finance Of and Consumer Portfolio
Can any of the company-specific risk be diversified away by investing in both Finance Of and Consumer Portfolio 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 Finance Of and Consumer Portfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finance of America and Consumer Portfolio Services, you can compare the effects of market volatilities on Finance Of and Consumer Portfolio 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 Finance Of with a short position of Consumer Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finance Of and Consumer Portfolio.
Diversification Opportunities for Finance Of and Consumer Portfolio
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Finance and Consumer is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Finance of America and Consumer Portfolio Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consumer Portfolio and Finance Of 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 Finance of America are associated (or correlated) with Consumer Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consumer Portfolio has no effect on the direction of Finance Of i.e., Finance Of and Consumer Portfolio go up and down completely randomly.
Pair Corralation between Finance Of and Consumer Portfolio
Considering the 90-day investment horizon Finance of America is expected to generate 4.39 times more return on investment than Consumer Portfolio. However, Finance Of is 4.39 times more volatile than Consumer Portfolio Services. It trades about 0.27 of its potential returns per unit of risk. Consumer Portfolio Services is currently generating about 0.1 per unit of risk. If you would invest 1,305 in Finance of America on August 27, 2024 and sell it today you would earn a total of 903.00 from holding Finance of America or generate 69.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finance of America vs. Consumer Portfolio Services
Performance |
| Timeline |
| Finance of America |
| Consumer Portfolio |
Finance Of and Consumer Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finance Of and Consumer Portfolio
The main advantage of trading using opposite Finance Of and Consumer Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finance Of position performs unexpectedly, Consumer Portfolio 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 Consumer Portfolio will offset losses from the drop in Consumer Portfolio's long position.| Finance Of vs. PowerUp Acquisition Corp | Finance Of vs. Aurora Innovation | Finance Of vs. HUMANA INC | Finance Of vs. Aquagold International |
| Consumer Portfolio vs. Atlanticus Holdings Corp | Consumer Portfolio vs. Mill City Ventures | Consumer Portfolio vs. Nelnet Inc | Consumer Portfolio vs. Senmiao Technology |
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 CEOs Directory module to screen CEOs from public companies around the world.
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