Correlation Between OppFi and 4 Less
Can any of the company-specific risk be diversified away by investing in both OppFi and 4 Less 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 4 Less into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OppFi Inc and 4 Less Group, you can compare the effects of market volatilities on OppFi and 4 Less 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 4 Less. Check out your portfolio center. Please also check ongoing floating volatility patterns of OppFi and 4 Less.
Diversification Opportunities for OppFi and 4 Less
Pay attention - limited upside
The 3 months correlation between OppFi and FLES is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding OppFi Inc and 4 Less Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 4 Less 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 4 Less. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 4 Less Group has no effect on the direction of OppFi i.e., OppFi and 4 Less go up and down completely randomly.
Pair Corralation between OppFi and 4 Less
Given the investment horizon of 90 days OppFi Inc is expected to generate 0.23 times more return on investment than 4 Less. However, OppFi Inc is 4.35 times less risky than 4 Less. It trades about 0.49 of its potential returns per unit of risk. 4 Less Group is currently generating about 0.1 per unit of risk. If you would invest 485.00 in OppFi Inc on September 4, 2024 and sell it today you would earn a total of 331.00 from holding OppFi Inc or generate 68.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
OppFi Inc vs. 4 Less Group
Performance |
| Timeline |
| OppFi Inc |
| 4 Less Group |
OppFi and 4 Less Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OppFi and 4 Less
The main advantage of trading using opposite OppFi and 4 Less positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OppFi position performs unexpectedly, 4 Less 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 4 Less will offset losses from the drop in 4 Less' long position.The idea behind OppFi Inc and 4 Less 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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