Correlation Between 360 Finance and SLM Corp
Can any of the company-specific risk be diversified away by investing in both 360 Finance and SLM Corp 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 360 Finance and SLM Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 360 Finance and SLM Corp, you can compare the effects of market volatilities on 360 Finance and SLM Corp 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 360 Finance with a short position of SLM Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of 360 Finance and SLM Corp.
Diversification Opportunities for 360 Finance and SLM Corp
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 360 and SLM is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding 360 Finance and SLM Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SLM Corp and 360 Finance 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 360 Finance are associated (or correlated) with SLM Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SLM Corp has no effect on the direction of 360 Finance i.e., 360 Finance and SLM Corp go up and down completely randomly.
Pair Corralation between 360 Finance and SLM Corp
Given the investment horizon of 90 days 360 Finance is expected to under-perform the SLM Corp. In addition to that, 360 Finance is 1.0 times more volatile than SLM Corp. It trades about -0.02 of its total potential returns per unit of risk. SLM Corp is currently generating about 0.3 per unit of volatility. If you would invest 2,235 in SLM Corp on August 28, 2024 and sell it today you would earn a total of 553.00 from holding SLM Corp or generate 24.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
360 Finance vs. SLM Corp
Performance |
| Timeline |
| 360 Finance |
| SLM Corp |
360 Finance and SLM Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 360 Finance and SLM Corp
The main advantage of trading using opposite 360 Finance and SLM Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 360 Finance position performs unexpectedly, SLM Corp 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 SLM Corp will offset losses from the drop in SLM Corp's long position.| 360 Finance vs. Marine Products | 360 Finance vs. Asure Software | 360 Finance vs. Marti Technologies | 360 Finance vs. Sonos Inc |
| SLM Corp vs. Orix Corp Ads | SLM Corp vs. FirstCash | SLM Corp vs. Medallion Financial Corp | SLM Corp vs. Oportun Financial Corp |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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