Correlation Between LOANDEPOT INC and SBI Insurance
Can any of the company-specific risk be diversified away by investing in both LOANDEPOT INC and SBI Insurance 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 SBI Insurance 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 SBI Insurance Group, you can compare the effects of market volatilities on LOANDEPOT INC and SBI Insurance 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 SBI Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of LOANDEPOT INC and SBI Insurance.
Diversification Opportunities for LOANDEPOT INC and SBI Insurance
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between LOANDEPOT and SBI is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding LOANDEPOT INC A and SBI Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Insurance 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 SBI Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Insurance Group has no effect on the direction of LOANDEPOT INC i.e., LOANDEPOT INC and SBI Insurance go up and down completely randomly.
Pair Corralation between LOANDEPOT INC and SBI Insurance
Assuming the 90 days horizon LOANDEPOT INC A is expected to under-perform the SBI Insurance. In addition to that, LOANDEPOT INC is 2.14 times more volatile than SBI Insurance Group. It trades about -0.28 of its total potential returns per unit of risk. SBI Insurance Group is currently generating about 0.24 per unit of volatility. If you would invest 555.00 in SBI Insurance Group on October 11, 2024 and sell it today you would earn a total of 90.00 from holding SBI Insurance Group or generate 16.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LOANDEPOT INC A vs. SBI Insurance Group
Performance |
| Timeline |
| LOANDEPOT INC A |
| SBI Insurance Group |
LOANDEPOT INC and SBI Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LOANDEPOT INC and SBI Insurance
The main advantage of trading using opposite LOANDEPOT INC and SBI Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LOANDEPOT INC position performs unexpectedly, SBI Insurance 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 SBI Insurance will offset losses from the drop in SBI Insurance's long position.| LOANDEPOT INC vs. GMO Internet | LOANDEPOT INC vs. Axway Software SA | LOANDEPOT INC vs. VITEC SOFTWARE GROUP | LOANDEPOT INC vs. Ribbon Communications |
| SBI Insurance vs. Performance Food Group | SBI Insurance vs. PREMIER FOODS | SBI Insurance vs. G III Apparel Group | SBI Insurance vs. alstria office REIT AG |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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