Correlation Between OppFi and Snam SpA
Can any of the company-specific risk be diversified away by investing in both OppFi and Snam SpA 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 Snam SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OppFi Inc and Snam SpA, you can compare the effects of market volatilities on OppFi and Snam SpA 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 Snam SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of OppFi and Snam SpA.
Diversification Opportunities for OppFi and Snam SpA
Very good diversification
The 3 months correlation between OppFi and Snam is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding OppFi Inc and Snam SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Snam SpA 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 Snam SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Snam SpA has no effect on the direction of OppFi i.e., OppFi and Snam SpA go up and down completely randomly.
Pair Corralation between OppFi and Snam SpA
Given the investment horizon of 90 days OppFi Inc is expected to generate 2.51 times more return on investment than Snam SpA. However, OppFi is 2.51 times more volatile than Snam SpA. It trades about 0.11 of its potential returns per unit of risk. Snam SpA is currently generating about -0.04 per unit of risk. If you would invest 427.00 in OppFi Inc on January 7, 2025 and sell it today you would earn a total of 389.00 from holding OppFi Inc or generate 91.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 47.95% |
| Values | Daily Returns |
OppFi Inc vs. Snam SpA
Performance |
| Timeline |
| OppFi Inc |
| Snam SpA |
OppFi and Snam SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OppFi and Snam SpA
The main advantage of trading using opposite OppFi and Snam SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OppFi position performs unexpectedly, Snam SpA 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 Snam SpA will offset losses from the drop in Snam SpA's long position.The idea behind OppFi Inc and Snam SpA 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.| Snam SpA vs. China Tontine Wines | Snam SpA vs. National Beverage Corp | Snam SpA vs. Primo Brands | Snam SpA vs. Sonida Senior Living |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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