Correlation Between OppFi and Denso Corp
Can any of the company-specific risk be diversified away by investing in both OppFi and Denso 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 OppFi and Denso Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OppFi Inc and Denso Corp ADR, you can compare the effects of market volatilities on OppFi and Denso 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 OppFi with a short position of Denso Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of OppFi and Denso Corp.
Diversification Opportunities for OppFi and Denso Corp
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between OppFi and Denso is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding OppFi Inc and Denso Corp ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Denso Corp ADR 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 Denso Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Denso Corp ADR has no effect on the direction of OppFi i.e., OppFi and Denso Corp go up and down completely randomly.
Pair Corralation between OppFi and Denso Corp
Given the investment horizon of 90 days OppFi Inc is expected to generate 2.5 times more return on investment than Denso Corp. However, OppFi is 2.5 times more volatile than Denso Corp ADR. It trades about -0.04 of its potential returns per unit of risk. Denso Corp ADR is currently generating about -0.16 per unit of risk. If you would invest 714.00 in OppFi Inc on September 13, 2024 and sell it today you would lose (30.00) from holding OppFi Inc or give up 4.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OppFi Inc vs. Denso Corp ADR
Performance |
| Timeline |
| OppFi Inc |
| Denso Corp ADR |
OppFi and Denso Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OppFi and Denso Corp
The main advantage of trading using opposite OppFi and Denso Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OppFi position performs unexpectedly, Denso 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 Denso Corp will offset losses from the drop in Denso Corp's long position.The idea behind OppFi Inc and Denso Corp ADR 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.| Denso Corp vs. PT Astra International | Denso Corp vs. Astra International Tbk | Denso Corp vs. Mobileye Global Class | Denso Corp vs. HUMANA INC |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |