Correlation Between OppFi and APA
Can any of the company-specific risk be diversified away by investing in both OppFi and APA 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 APA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OppFi Inc and APA Group, you can compare the effects of market volatilities on OppFi and APA 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 APA. Check out your portfolio center. Please also check ongoing floating volatility patterns of OppFi and APA.
Diversification Opportunities for OppFi and APA
Excellent diversification
The 3 months correlation between OppFi and APA is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding OppFi Inc and APA Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APA Group 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 APA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APA Group has no effect on the direction of OppFi i.e., OppFi and APA go up and down completely randomly.
Pair Corralation between OppFi and APA
Given the investment horizon of 90 days OppFi Inc is expected to generate 1.22 times more return on investment than APA. However, OppFi is 1.22 times more volatile than APA Group. It trades about 0.09 of its potential returns per unit of risk. APA Group is currently generating about 0.01 per unit of risk. If you would invest 233.00 in OppFi Inc on September 12, 2024 and sell it today you would earn a total of 452.00 from holding OppFi Inc or generate 193.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 92.75% |
| Values | Daily Returns |
OppFi Inc vs. APA Group
Performance |
| Timeline |
| OppFi Inc |
| APA Group |
OppFi and APA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OppFi and APA
The main advantage of trading using opposite OppFi and APA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OppFi position performs unexpectedly, APA 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 APA will offset losses from the drop in APA's long position.The idea behind OppFi Inc and APA Group 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.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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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