Correlation Between LOANDEPOT INC and LendingTree
Can any of the company-specific risk be diversified away by investing in both LOANDEPOT INC and LendingTree 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 LendingTree 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 LendingTree, you can compare the effects of market volatilities on LOANDEPOT INC and LendingTree 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 LendingTree. Check out your portfolio center. Please also check ongoing floating volatility patterns of LOANDEPOT INC and LendingTree.
Diversification Opportunities for LOANDEPOT INC and LendingTree
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between LOANDEPOT and LendingTree is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding LOANDEPOT INC A and LendingTree in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LendingTree 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 LendingTree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LendingTree has no effect on the direction of LOANDEPOT INC i.e., LOANDEPOT INC and LendingTree go up and down completely randomly.
Pair Corralation between LOANDEPOT INC and LendingTree
Assuming the 90 days horizon LOANDEPOT INC A is expected to under-perform the LendingTree. In addition to that, LOANDEPOT INC is 1.19 times more volatile than LendingTree. It trades about -0.04 of its total potential returns per unit of risk. LendingTree is currently generating about -0.01 per unit of volatility. If you would invest 5,178 in LendingTree on November 2, 2024 and sell it today you would lose (738.00) from holding LendingTree or give up 14.25% 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. LendingTree
Performance |
| Timeline |
| LOANDEPOT INC A |
| LendingTree |
LOANDEPOT INC and LendingTree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LOANDEPOT INC and LendingTree
The main advantage of trading using opposite LOANDEPOT INC and LendingTree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LOANDEPOT INC position performs unexpectedly, LendingTree 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 LendingTree will offset losses from the drop in LendingTree's long position.| LOANDEPOT INC vs. Jacquet Metal Service | LOANDEPOT INC vs. ADRIATIC METALS LS 013355 | LOANDEPOT INC vs. SIERRA METALS | LOANDEPOT INC vs. Pentair plc |
| LendingTree vs. MAGNUM MINING EXP | LendingTree vs. GEELY AUTOMOBILE | LendingTree vs. Carsales | LendingTree vs. Perseus Mining Limited |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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