Correlation Between OppFi and Liberty Northwest
Can any of the company-specific risk be diversified away by investing in both OppFi and Liberty Northwest 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 Liberty Northwest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OppFi Inc and Liberty Northwest Bancorp, you can compare the effects of market volatilities on OppFi and Liberty Northwest 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 Liberty Northwest. Check out your portfolio center. Please also check ongoing floating volatility patterns of OppFi and Liberty Northwest.
Diversification Opportunities for OppFi and Liberty Northwest
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between OppFi and Liberty is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding OppFi Inc and Liberty Northwest Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Northwest Bancorp 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 Liberty Northwest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Northwest Bancorp has no effect on the direction of OppFi i.e., OppFi and Liberty Northwest go up and down completely randomly.
Pair Corralation between OppFi and Liberty Northwest
Given the investment horizon of 90 days OppFi Inc is expected to generate 3.39 times more return on investment than Liberty Northwest. However, OppFi is 3.39 times more volatile than Liberty Northwest Bancorp. It trades about 0.41 of its potential returns per unit of risk. Liberty Northwest Bancorp is currently generating about 0.01 per unit of risk. If you would invest 808.00 in OppFi Inc on November 3, 2024 and sell it today you would earn a total of 563.00 from holding OppFi Inc or generate 69.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
OppFi Inc vs. Liberty Northwest Bancorp
Performance |
| Timeline |
| OppFi Inc |
| Liberty Northwest Bancorp |
OppFi and Liberty Northwest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OppFi and Liberty Northwest
The main advantage of trading using opposite OppFi and Liberty Northwest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OppFi position performs unexpectedly, Liberty Northwest 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 Liberty Northwest will offset losses from the drop in Liberty Northwest's long position.The idea behind OppFi Inc and Liberty Northwest Bancorp 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.| Liberty Northwest vs. Ballys Corp | Liberty Northwest vs. Tyson Foods | Liberty Northwest vs. Cementos Pacasmayo SAA | Liberty Northwest vs. Parker Hannifin |
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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