Correlation Between OneMain Holdings and SLM Corp
Can any of the company-specific risk be diversified away by investing in both OneMain Holdings and SLM Corp 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 OneMain Holdings and SLM Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OneMain Holdings and SLM Corp, you can compare the effects of market volatilities on OneMain Holdings and SLM Corp 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 OneMain Holdings with a short position of SLM Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of OneMain Holdings and SLM Corp.
Diversification Opportunities for OneMain Holdings and SLM Corp
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between OneMain and SLM is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding OneMain Holdings and SLM Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SLM Corp and OneMain Holdings 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 OneMain Holdings are associated (or correlated) with SLM Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SLM Corp has no effect on the direction of OneMain Holdings i.e., OneMain Holdings and SLM Corp go up and down completely randomly.
Pair Corralation between OneMain Holdings and SLM Corp
Considering the 90-day investment horizon OneMain Holdings is expected to generate 1.21 times less return on investment than SLM Corp. In addition to that, OneMain Holdings is 1.02 times more volatile than SLM Corp. It trades about 0.08 of its total potential returns per unit of risk. SLM Corp is currently generating about 0.11 per unit of volatility. If you would invest 2,099 in SLM Corp on September 1, 2024 and sell it today you would earn a total of 639.00 from holding SLM Corp or generate 30.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
OneMain Holdings vs. SLM Corp
Performance |
| Timeline |
| OneMain Holdings |
| SLM Corp |
OneMain Holdings and SLM Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OneMain Holdings and SLM Corp
The main advantage of trading using opposite OneMain Holdings and SLM Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OneMain Holdings position performs unexpectedly, SLM Corp 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 SLM Corp will offset losses from the drop in SLM Corp's long position.| OneMain Holdings vs. 360 Finance | OneMain Holdings vs. Atlanticus Holdings | OneMain Holdings vs. Qudian Inc | OneMain Holdings vs. Enova International |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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