Correlation Between Forge Global and OppFi
Can any of the company-specific risk be diversified away by investing in both Forge Global and OppFi 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 Forge Global and OppFi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forge Global Holdings and OppFi Inc, you can compare the effects of market volatilities on Forge Global and OppFi 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 Forge Global with a short position of OppFi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forge Global and OppFi.
Diversification Opportunities for Forge Global and OppFi
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Forge and OppFi is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Forge Global Holdings and OppFi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OppFi Inc and Forge Global 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 Forge Global Holdings are associated (or correlated) with OppFi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OppFi Inc has no effect on the direction of Forge Global i.e., Forge Global and OppFi go up and down completely randomly.
Pair Corralation between Forge Global and OppFi
Given the investment horizon of 90 days Forge Global Holdings is expected to under-perform the OppFi. In addition to that, Forge Global is 1.2 times more volatile than OppFi Inc. It trades about -0.07 of its total potential returns per unit of risk. OppFi Inc is currently generating about 0.33 per unit of volatility. If you would invest 539.00 in OppFi Inc on August 27, 2024 and sell it today you would earn a total of 246.00 from holding OppFi Inc or generate 45.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Forge Global Holdings vs. OppFi Inc
Performance |
| Timeline |
| Forge Global Holdings |
| OppFi Inc |
Forge Global and OppFi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forge Global and OppFi
The main advantage of trading using opposite Forge Global and OppFi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forge Global position performs unexpectedly, OppFi 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 OppFi will offset losses from the drop in OppFi's long position.| Forge Global vs. Clearwater Analytics Holdings | Forge Global vs. Expensify | Forge Global vs. Envestnet | Forge Global vs. CS Disco LLC |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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