Correlation Between OppFi and Unilever Indonesia
Can any of the company-specific risk be diversified away by investing in both OppFi and Unilever Indonesia 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 Unilever Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OppFi Inc and Unilever Indonesia Tbk, you can compare the effects of market volatilities on OppFi and Unilever Indonesia 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 Unilever Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of OppFi and Unilever Indonesia.
Diversification Opportunities for OppFi and Unilever Indonesia
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between OppFi and Unilever is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding OppFi Inc and Unilever Indonesia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unilever Indonesia Tbk 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 Unilever Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unilever Indonesia Tbk has no effect on the direction of OppFi i.e., OppFi and Unilever Indonesia go up and down completely randomly.
Pair Corralation between OppFi and Unilever Indonesia
Given the investment horizon of 90 days OppFi Inc is expected to generate 1.9 times more return on investment than Unilever Indonesia. However, OppFi is 1.9 times more volatile than Unilever Indonesia Tbk. It trades about 0.4 of its potential returns per unit of risk. Unilever Indonesia Tbk is currently generating about 0.08 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 283.00 from holding OppFi Inc or generate 58.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OppFi Inc vs. Unilever Indonesia Tbk
Performance |
| Timeline |
| OppFi Inc |
| Unilever Indonesia Tbk |
OppFi and Unilever Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OppFi and Unilever Indonesia
The main advantage of trading using opposite OppFi and Unilever Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OppFi position performs unexpectedly, Unilever Indonesia 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 Unilever Indonesia will offset losses from the drop in Unilever Indonesia's long position.The idea behind OppFi Inc and Unilever Indonesia Tbk 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.| Unilever Indonesia vs. Inter Parfums | Unilever Indonesia vs. European Wax Center | Unilever Indonesia vs. Spectrum Brands Holdings | Unilever Indonesia vs. Edgewell Personal Care |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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