Correlation Between LOANDEPOT INC and IMPACT SILVER

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Can any of the company-specific risk be diversified away by investing in both LOANDEPOT INC and IMPACT SILVER 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 IMPACT SILVER 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 IMPACT SILVER, you can compare the effects of market volatilities on LOANDEPOT INC and IMPACT SILVER 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 IMPACT SILVER. Check out your portfolio center. Please also check ongoing floating volatility patterns of LOANDEPOT INC and IMPACT SILVER.

Diversification Opportunities for LOANDEPOT INC and IMPACT SILVER

LOANDEPOTIMPACTDiversified AwayLOANDEPOTIMPACTDiversified Away100%
-0.41
  Correlation Coefficient

Very good diversification

The 3 months correlation between LOANDEPOT and IMPACT is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding LOANDEPOT INC A and IMPACT SILVER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMPACT SILVER 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 IMPACT SILVER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMPACT SILVER has no effect on the direction of LOANDEPOT INC i.e., LOANDEPOT INC and IMPACT SILVER go up and down completely randomly.

Pair Corralation between LOANDEPOT INC and IMPACT SILVER

Assuming the 90 days horizon LOANDEPOT INC A is expected to generate 1.15 times more return on investment than IMPACT SILVER. However, LOANDEPOT INC is 1.15 times more volatile than IMPACT SILVER. It trades about -0.09 of its potential returns per unit of risk. IMPACT SILVER is currently generating about -0.36 per unit of risk. If you would invest  214.00  in LOANDEPOT INC A on September 19, 2024 and sell it today you would lose (15.00) from holding LOANDEPOT INC A or give up 7.01% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

LOANDEPOT INC A  vs.  IMPACT SILVER

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -2002040
JavaScript chart by amCharts 3.21.15LDD IKL
       Timeline  
LOANDEPOT INC A 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days LOANDEPOT INC A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec1.822.22.42.6
IMPACT SILVER 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in IMPACT SILVER are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile essential indicators, IMPACT SILVER may actually be approaching a critical reversion point that can send shares even higher in January 2025.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec0.160.170.180.190.20.21

LOANDEPOT INC and IMPACT SILVER Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-8.29-6.25-4.21-2.18-0.141.823.785.737.699.64 0.01300.01350.01400.01450.01500.0155
JavaScript chart by amCharts 3.21.15LDD IKL
       Returns  

Pair Trading with LOANDEPOT INC and IMPACT SILVER

The main advantage of trading using opposite LOANDEPOT INC and IMPACT SILVER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LOANDEPOT INC position performs unexpectedly, IMPACT SILVER 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 IMPACT SILVER will offset losses from the drop in IMPACT SILVER's long position.
The idea behind LOANDEPOT INC A and IMPACT SILVER pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Global Correlations module to find global opportunities by holding instruments from different markets.

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