Correlation Between Open Lending and Porch
Can any of the company-specific risk be diversified away by investing in both Open Lending and Porch 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 Open Lending and Porch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Open Lending Corp and Porch Group, you can compare the effects of market volatilities on Open Lending and Porch 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 Open Lending with a short position of Porch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Open Lending and Porch.
Diversification Opportunities for Open Lending and Porch
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Open and Porch is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Open Lending Corp and Porch Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Porch Group and Open Lending 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 Open Lending Corp are associated (or correlated) with Porch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Porch Group has no effect on the direction of Open Lending i.e., Open Lending and Porch go up and down completely randomly.
Pair Corralation between Open Lending and Porch
Given the investment horizon of 90 days Open Lending Corp is expected to generate 0.58 times more return on investment than Porch. However, Open Lending Corp is 1.73 times less risky than Porch. It trades about -0.29 of its potential returns per unit of risk. Porch Group is currently generating about -0.29 per unit of risk. If you would invest 595.00 in Open Lending Corp on October 26, 2024 and sell it today you would lose (78.00) from holding Open Lending Corp or give up 13.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Open Lending Corp vs. Porch Group
Performance |
| Timeline |
| Open Lending Corp |
| Porch Group |
Open Lending and Porch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Open Lending and Porch
The main advantage of trading using opposite Open Lending and Porch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Open Lending position performs unexpectedly, Porch 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 Porch will offset losses from the drop in Porch's long position.| Open Lending vs. EZCORP Inc | Open Lending vs. Orix Corp Ads | Open Lending vs. SLM Corp | Open Lending vs. Navient Corp |
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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