Correlation Between OppFi and FS Energy
Can any of the company-specific risk be diversified away by investing in both OppFi and FS Energy 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 FS Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OppFi Inc and FS Energy and, you can compare the effects of market volatilities on OppFi and FS Energy 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 FS Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of OppFi and FS Energy.
Diversification Opportunities for OppFi and FS Energy
Very good diversification
The 3 months correlation between OppFi and FSEN is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding OppFi Inc and FS Energy and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FS Energy 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 FS Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FS Energy has no effect on the direction of OppFi i.e., OppFi and FS Energy go up and down completely randomly.
Pair Corralation between OppFi and FS Energy
Given the investment horizon of 90 days OppFi Inc is expected to generate 1.3 times more return on investment than FS Energy. However, OppFi is 1.3 times more volatile than FS Energy and. It trades about 0.38 of its potential returns per unit of risk. FS Energy and is currently generating about -0.06 per unit of risk. If you would invest 858.00 in OppFi Inc on November 4, 2024 and sell it today you would earn a total of 513.00 from holding OppFi Inc or generate 59.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OppFi Inc vs. FS Energy and
Performance |
| Timeline |
| OppFi Inc |
| FS Energy |
OppFi and FS Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OppFi and FS Energy
The main advantage of trading using opposite OppFi and FS Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OppFi position performs unexpectedly, FS Energy 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 FS Energy will offset losses from the drop in FS Energy's long position.The idea behind OppFi Inc and FS Energy and 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.| FS Energy vs. Business Development Corp | FS Energy vs. Inpex Corp ADR | FS Energy vs. Daikin IndustriesLtd |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |