Correlation Between FIRST SHIP and LOANDEPOT INC
Can any of the company-specific risk be diversified away by investing in both FIRST SHIP and LOANDEPOT INC 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 FIRST SHIP and LOANDEPOT INC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIRST SHIP LEASE and LOANDEPOT INC A, you can compare the effects of market volatilities on FIRST SHIP and LOANDEPOT INC 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 FIRST SHIP with a short position of LOANDEPOT INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIRST SHIP and LOANDEPOT INC.
Diversification Opportunities for FIRST SHIP and LOANDEPOT INC
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FIRST and LOANDEPOT is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding FIRST SHIP LEASE and LOANDEPOT INC A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOANDEPOT INC A and FIRST SHIP 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 FIRST SHIP LEASE are associated (or correlated) with LOANDEPOT INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOANDEPOT INC A has no effect on the direction of FIRST SHIP i.e., FIRST SHIP and LOANDEPOT INC go up and down completely randomly.
Pair Corralation between FIRST SHIP and LOANDEPOT INC
Assuming the 90 days horizon FIRST SHIP LEASE is expected to generate 0.45 times more return on investment than LOANDEPOT INC. However, FIRST SHIP LEASE is 2.24 times less risky than LOANDEPOT INC. It trades about 0.11 of its potential returns per unit of risk. LOANDEPOT INC A is currently generating about -0.02 per unit of risk. If you would invest 2.26 in FIRST SHIP LEASE on October 23, 2024 and sell it today you would earn a total of 0.08 from holding FIRST SHIP LEASE or generate 3.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
FIRST SHIP LEASE vs. LOANDEPOT INC A
Performance |
| Timeline |
| FIRST SHIP LEASE |
| LOANDEPOT INC A |
FIRST SHIP and LOANDEPOT INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIRST SHIP and LOANDEPOT INC
The main advantage of trading using opposite FIRST SHIP and LOANDEPOT INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIRST SHIP position performs unexpectedly, LOANDEPOT INC 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 LOANDEPOT INC will offset losses from the drop in LOANDEPOT INC's long position.| FIRST SHIP vs. INDO RAMA SYNTHETIC | FIRST SHIP vs. CHAMPION IRON | FIRST SHIP vs. Olympic Steel | FIRST SHIP vs. Soken Chemical Engineering |
| LOANDEPOT INC vs. Urban Outfitters | LOANDEPOT INC vs. CVR Medical Corp | LOANDEPOT INC vs. American Eagle Outfitters | LOANDEPOT INC vs. ONWARD MEDICAL BV |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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