Correlation Between Loandepot and Vestis
Can any of the company-specific risk be diversified away by investing in both Loandepot and Vestis 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 Vestis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loandepot and Vestis, you can compare the effects of market volatilities on Loandepot and Vestis 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 Vestis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loandepot and Vestis.
Diversification Opportunities for Loandepot and Vestis
Very good diversification
The 3 months correlation between Loandepot and Vestis is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Loandepot and Vestis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestis 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 Vestis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestis has no effect on the direction of Loandepot i.e., Loandepot and Vestis go up and down completely randomly.
Pair Corralation between Loandepot and Vestis
Considering the 90-day investment horizon Loandepot is expected to generate 4.13 times less return on investment than Vestis. In addition to that, Loandepot is 1.76 times more volatile than Vestis. It trades about 0.01 of its total potential returns per unit of risk. Vestis is currently generating about 0.09 per unit of volatility. If you would invest 1,175 in Vestis on October 13, 2024 and sell it today you would earn a total of 422.00 from holding Vestis or generate 35.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loandepot vs. Vestis
Performance |
| Timeline |
| Loandepot |
| Vestis |
Loandepot and Vestis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loandepot and Vestis
The main advantage of trading using opposite Loandepot and Vestis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loandepot position performs unexpectedly, Vestis 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 Vestis will offset losses from the drop in Vestis' long position.| Loandepot vs. CNFinance Holdings | Loandepot vs. Security National Financial | Loandepot vs. Encore Capital Group | Loandepot vs. UWM Holdings Corp |
| Vestis vs. Mayfair Gold Corp | Vestis vs. Tapestry | Vestis vs. Ryanair Holdings PLC | Vestis vs. Corsair Gaming |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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