Correlation Between OppFi and ALR Technologies
Can any of the company-specific risk be diversified away by investing in both OppFi and ALR Technologies 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 OppFi and ALR Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OppFi Inc and ALR Technologies, you can compare the effects of market volatilities on OppFi and ALR Technologies 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 OppFi with a short position of ALR Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of OppFi and ALR Technologies.
Diversification Opportunities for OppFi and ALR Technologies
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between OppFi and ALR is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding OppFi Inc and ALR Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALR Technologies and OppFi 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 OppFi Inc are associated (or correlated) with ALR Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALR Technologies has no effect on the direction of OppFi i.e., OppFi and ALR Technologies go up and down completely randomly.
Pair Corralation between OppFi and ALR Technologies
Given the investment horizon of 90 days OppFi Inc is expected to generate 0.48 times more return on investment than ALR Technologies. However, OppFi Inc is 2.09 times less risky than ALR Technologies. It trades about 0.38 of its potential returns per unit of risk. ALR Technologies is currently generating about -0.26 per unit of risk. If you would invest 716.00 in OppFi Inc on October 23, 2024 and sell it today you would earn a total of 386.00 from holding OppFi Inc or generate 53.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
OppFi Inc vs. ALR Technologies
Performance |
| Timeline |
| OppFi Inc |
| ALR Technologies |
OppFi and ALR Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OppFi and ALR Technologies
The main advantage of trading using opposite OppFi and ALR Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OppFi position performs unexpectedly, ALR Technologies 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 ALR Technologies will offset losses from the drop in ALR Technologies' long position.The idea behind OppFi Inc and ALR Technologies 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.| ALR Technologies vs. Aurora Spine | ALR Technologies vs. Ainos Inc | ALR Technologies vs. Armm Inc | ALR Technologies vs. Cellink AB |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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