Correlation Between LOANDEPOT INC and CHINA EDUCATION
Can any of the company-specific risk be diversified away by investing in both LOANDEPOT INC and CHINA EDUCATION 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 CHINA EDUCATION 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 CHINA EDUCATION GROUP, you can compare the effects of market volatilities on LOANDEPOT INC and CHINA EDUCATION 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 CHINA EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of LOANDEPOT INC and CHINA EDUCATION.
Diversification Opportunities for LOANDEPOT INC and CHINA EDUCATION
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between LOANDEPOT and CHINA is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding LOANDEPOT INC A and CHINA EDUCATION GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA EDUCATION GROUP 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 CHINA EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA EDUCATION GROUP has no effect on the direction of LOANDEPOT INC i.e., LOANDEPOT INC and CHINA EDUCATION go up and down completely randomly.
Pair Corralation between LOANDEPOT INC and CHINA EDUCATION
Assuming the 90 days horizon LOANDEPOT INC A is expected to generate 2.11 times more return on investment than CHINA EDUCATION. However, LOANDEPOT INC is 2.11 times more volatile than CHINA EDUCATION GROUP. It trades about -0.03 of its potential returns per unit of risk. CHINA EDUCATION GROUP is currently generating about -0.21 per unit of risk. If you would invest 178.00 in LOANDEPOT INC A on October 22, 2024 and sell it today you would lose (6.00) from holding LOANDEPOT INC A or give up 3.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LOANDEPOT INC A vs. CHINA EDUCATION GROUP
Performance |
| Timeline |
| LOANDEPOT INC A |
| CHINA EDUCATION GROUP |
LOANDEPOT INC and CHINA EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LOANDEPOT INC and CHINA EDUCATION
The main advantage of trading using opposite LOANDEPOT INC and CHINA EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LOANDEPOT INC position performs unexpectedly, CHINA EDUCATION 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 CHINA EDUCATION will offset losses from the drop in CHINA EDUCATION's long position.| LOANDEPOT INC vs. UNITED RENTALS | LOANDEPOT INC vs. The Hanover Insurance | LOANDEPOT INC vs. QBE Insurance Group | LOANDEPOT INC vs. Insurance Australia Group |
| CHINA EDUCATION vs. LOANDEPOT INC A | CHINA EDUCATION vs. Air Lease | CHINA EDUCATION vs. FUYO GENERAL LEASE | CHINA EDUCATION vs. United Insurance Holdings |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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