Correlation Between SLM Corp and Open Lending
Can any of the company-specific risk be diversified away by investing in both SLM Corp and Open Lending 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 SLM Corp and Open Lending into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SLM Corp and Open Lending Corp, you can compare the effects of market volatilities on SLM Corp and Open Lending 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 SLM Corp with a short position of Open Lending. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLM Corp and Open Lending.
Diversification Opportunities for SLM Corp and Open Lending
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SLM and Open is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding SLM Corp and Open Lending Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Open Lending Corp and SLM Corp 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 SLM Corp are associated (or correlated) with Open Lending. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Open Lending Corp has no effect on the direction of SLM Corp i.e., SLM Corp and Open Lending go up and down completely randomly.
Pair Corralation between SLM Corp and Open Lending
Considering the 90-day investment horizon SLM Corp is expected to generate 0.62 times more return on investment than Open Lending. However, SLM Corp is 1.62 times less risky than Open Lending. It trades about 0.06 of its potential returns per unit of risk. Open Lending Corp is currently generating about 0.01 per unit of risk. If you would invest 1,598 in SLM Corp on August 24, 2024 and sell it today you would earn a total of 1,115 from holding SLM Corp or generate 69.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLM Corp vs. Open Lending Corp
Performance |
| Timeline |
| SLM Corp |
| Open Lending Corp |
SLM Corp and Open Lending Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLM Corp and Open Lending
The main advantage of trading using opposite SLM Corp and Open Lending positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLM Corp position performs unexpectedly, Open Lending 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 Open Lending will offset losses from the drop in Open Lending's long position.| SLM Corp vs. Orix Corp Ads | SLM Corp vs. FirstCash | SLM Corp vs. Medallion Financial Corp | SLM Corp vs. Oportun Financial Corp |
| Open Lending vs. EZCORP Inc | Open Lending vs. Orix Corp Ads | Open Lending vs. SLM Corp | Open Lending vs. Navient 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |