Correlation Between LOANDEPOT INC and Aluminumof China
Can any of the company-specific risk be diversified away by investing in both LOANDEPOT INC and Aluminumof China 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 LOANDEPOT INC and Aluminumof China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LOANDEPOT INC A and Aluminum of, you can compare the effects of market volatilities on LOANDEPOT INC and Aluminumof China 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 LOANDEPOT INC with a short position of Aluminumof China. Check out your portfolio center. Please also check ongoing floating volatility patterns of LOANDEPOT INC and Aluminumof China.
Diversification Opportunities for LOANDEPOT INC and Aluminumof China
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LOANDEPOT and Aluminumof is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding LOANDEPOT INC A and Aluminum of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aluminumof China and LOANDEPOT INC 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 LOANDEPOT INC A are associated (or correlated) with Aluminumof China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aluminumof China has no effect on the direction of LOANDEPOT INC i.e., LOANDEPOT INC and Aluminumof China go up and down completely randomly.
Pair Corralation between LOANDEPOT INC and Aluminumof China
Assuming the 90 days horizon LOANDEPOT INC is expected to generate 3.44 times less return on investment than Aluminumof China. In addition to that, LOANDEPOT INC is 1.37 times more volatile than Aluminum of. It trades about 0.01 of its total potential returns per unit of risk. Aluminum of is currently generating about 0.05 per unit of volatility. If you would invest 32.00 in Aluminum of on November 6, 2024 and sell it today you would earn a total of 29.00 from holding Aluminum of or generate 90.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LOANDEPOT INC A vs. Aluminum of
Performance |
| Timeline |
| LOANDEPOT INC A |
| Aluminumof China |
LOANDEPOT INC and Aluminumof China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LOANDEPOT INC and Aluminumof China
The main advantage of trading using opposite LOANDEPOT INC and Aluminumof China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LOANDEPOT INC position performs unexpectedly, Aluminumof China 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 Aluminumof China will offset losses from the drop in Aluminumof China's long position.| LOANDEPOT INC vs. TROPHY GAMES DEV | LOANDEPOT INC vs. Hochschild Mining plc | LOANDEPOT INC vs. Scientific Games | LOANDEPOT INC vs. HOCHSCHILD MINING |
| Aluminumof China vs. UNITED RENTALS | Aluminumof China vs. OFFICE DEPOT | Aluminumof China vs. BORR DRILLING NEW | Aluminumof China vs. SCANSOURCE |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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