Correlation Between Loandepot and Global Net
Can any of the company-specific risk be diversified away by investing in both Loandepot and Global Net 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 and Global Net into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loandepot and Global Net Lease, you can compare the effects of market volatilities on Loandepot and Global Net 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 with a short position of Global Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loandepot and Global Net.
Diversification Opportunities for Loandepot and Global Net
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Loandepot and Global is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Loandepot and Global Net Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Net Lease and Loandepot 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 are associated (or correlated) with Global Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Net Lease has no effect on the direction of Loandepot i.e., Loandepot and Global Net go up and down completely randomly.
Pair Corralation between Loandepot and Global Net
Considering the 90-day investment horizon Loandepot is expected to generate 1.88 times less return on investment than Global Net. In addition to that, Loandepot is 4.18 times more volatile than Global Net Lease. It trades about 0.01 of its total potential returns per unit of risk. Global Net Lease is currently generating about 0.1 per unit of volatility. If you would invest 1,928 in Global Net Lease on October 13, 2024 and sell it today you would earn a total of 319.00 from holding Global Net Lease or generate 16.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loandepot vs. Global Net Lease
Performance |
| Timeline |
| Loandepot |
| Global Net Lease |
Loandepot and Global Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loandepot and Global Net
The main advantage of trading using opposite Loandepot and Global Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loandepot position performs unexpectedly, Global Net 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 Global Net will offset losses from the drop in Global Net's long position.| Loandepot vs. CNFinance Holdings | Loandepot vs. Security National Financial | Loandepot vs. Encore Capital Group | Loandepot vs. UWM Holdings Corp |
| Global Net vs. Bt Brands | Global Net vs. Constellation Brands Class | Global Net vs. Philip Morris International | Global Net vs. Vita Coco |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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