Correlation Between LOANDEPOT INC and Canadian Natural
Can any of the company-specific risk be diversified away by investing in both LOANDEPOT INC and Canadian Natural 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 Canadian Natural 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 Canadian Natural Resources, you can compare the effects of market volatilities on LOANDEPOT INC and Canadian Natural 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 Canadian Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of LOANDEPOT INC and Canadian Natural.
Diversification Opportunities for LOANDEPOT INC and Canadian Natural
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between LOANDEPOT and Canadian is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding LOANDEPOT INC A and Canadian Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Natural Res 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 Canadian Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Natural Res has no effect on the direction of LOANDEPOT INC i.e., LOANDEPOT INC and Canadian Natural go up and down completely randomly.
Pair Corralation between LOANDEPOT INC and Canadian Natural
Assuming the 90 days horizon LOANDEPOT INC A is expected to under-perform the Canadian Natural. In addition to that, LOANDEPOT INC is 2.82 times more volatile than Canadian Natural Resources. It trades about 0.0 of its total potential returns per unit of risk. Canadian Natural Resources is currently generating about 0.04 per unit of volatility. If you would invest 2,630 in Canadian Natural Resources on November 3, 2024 and sell it today you would earn a total of 341.00 from holding Canadian Natural Resources or generate 12.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
LOANDEPOT INC A vs. Canadian Natural Resources
Performance |
| Timeline |
| LOANDEPOT INC A |
| Canadian Natural Res |
LOANDEPOT INC and Canadian Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LOANDEPOT INC and Canadian Natural
The main advantage of trading using opposite LOANDEPOT INC and Canadian Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LOANDEPOT INC position performs unexpectedly, Canadian Natural 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 Canadian Natural will offset losses from the drop in Canadian Natural's long position.| LOANDEPOT INC vs. URBAN OUTFITTERS | LOANDEPOT INC vs. Universal Health Realty | LOANDEPOT INC vs. Tsingtao Brewery | LOANDEPOT INC vs. RCI Hospitality Holdings |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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