Correlation Between Moelis and OneMain Holdings
Can any of the company-specific risk be diversified away by investing in both Moelis and OneMain Holdings 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 Moelis and OneMain Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moelis Co and OneMain Holdings, you can compare the effects of market volatilities on Moelis and OneMain Holdings 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 Moelis with a short position of OneMain Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moelis and OneMain Holdings.
Diversification Opportunities for Moelis and OneMain Holdings
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Moelis and OneMain is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Moelis Co and OneMain Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OneMain Holdings and Moelis 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 Moelis Co are associated (or correlated) with OneMain Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OneMain Holdings has no effect on the direction of Moelis i.e., Moelis and OneMain Holdings go up and down completely randomly.
Pair Corralation between Moelis and OneMain Holdings
Allowing for the 90-day total investment horizon Moelis Co is expected to generate 1.14 times more return on investment than OneMain Holdings. However, Moelis is 1.14 times more volatile than OneMain Holdings. It trades about 0.12 of its potential returns per unit of risk. OneMain Holdings is currently generating about 0.1 per unit of risk. If you would invest 4,046 in Moelis Co on September 1, 2024 and sell it today you would earn a total of 3,652 from holding Moelis Co or generate 90.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Moelis Co vs. OneMain Holdings
Performance |
| Timeline |
| Moelis |
| OneMain Holdings |
Moelis and OneMain Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moelis and OneMain Holdings
The main advantage of trading using opposite Moelis and OneMain Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moelis position performs unexpectedly, OneMain Holdings 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 OneMain Holdings will offset losses from the drop in OneMain Holdings' long position.The idea behind Moelis Co and OneMain Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| OneMain Holdings vs. 360 Finance | OneMain Holdings vs. Atlanticus Holdings | OneMain Holdings vs. Qudian Inc | OneMain Holdings vs. Enova International |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |