Correlation Between Oportun Financial and X Financial
Can any of the company-specific risk be diversified away by investing in both Oportun Financial and X Financial 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 Oportun Financial and X Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oportun Financial Corp and X Financial Class, you can compare the effects of market volatilities on Oportun Financial and X Financial 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 Oportun Financial with a short position of X Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oportun Financial and X Financial.
Diversification Opportunities for Oportun Financial and X Financial
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Oportun and XYF is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Oportun Financial Corp and X Financial Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X Financial Class and Oportun Financial 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 Oportun Financial Corp are associated (or correlated) with X Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X Financial Class has no effect on the direction of Oportun Financial i.e., Oportun Financial and X Financial go up and down completely randomly.
Pair Corralation between Oportun Financial and X Financial
Given the investment horizon of 90 days Oportun Financial is expected to generate 3.89 times less return on investment than X Financial. In addition to that, Oportun Financial is 1.63 times more volatile than X Financial Class. It trades about 0.01 of its total potential returns per unit of risk. X Financial Class is currently generating about 0.08 per unit of volatility. If you would invest 359.00 in X Financial Class on August 31, 2024 and sell it today you would earn a total of 399.00 from holding X Financial Class or generate 111.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oportun Financial Corp vs. X Financial Class
Performance |
| Timeline |
| Oportun Financial Corp |
| X Financial Class |
Oportun Financial and X Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oportun Financial and X Financial
The main advantage of trading using opposite Oportun Financial and X Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oportun Financial position performs unexpectedly, X Financial 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 X Financial will offset losses from the drop in X Financial's long position.| Oportun Financial vs. Visa Class A | Oportun Financial vs. RLJ Lodging Trust | Oportun Financial vs. Aquagold International | Oportun Financial vs. Stepstone Group |
| X Financial vs. LM Funding America | X Financial vs. Nisun International Enterprise | X Financial vs. Qudian Inc | X Financial vs. FinVolution Group |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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