Correlation Between SLM Corp and Oportun Financial
Can any of the company-specific risk be diversified away by investing in both SLM Corp and Oportun 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 SLM Corp and Oportun Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SLM Corp Pb and Oportun Financial Corp, you can compare the effects of market volatilities on SLM Corp and Oportun 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 SLM Corp with a short position of Oportun Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLM Corp and Oportun Financial.
Diversification Opportunities for SLM Corp and Oportun Financial
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SLM and Oportun is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding SLM Corp Pb and Oportun Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oportun Financial 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 Pb are associated (or correlated) with Oportun Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oportun Financial Corp has no effect on the direction of SLM Corp i.e., SLM Corp and Oportun Financial go up and down completely randomly.
Pair Corralation between SLM Corp and Oportun Financial
Assuming the 90 days horizon SLM Corp is expected to generate 1.13 times less return on investment than Oportun Financial. But when comparing it to its historical volatility, SLM Corp Pb is 5.69 times less risky than Oportun Financial. It trades about 0.09 of its potential returns per unit of risk. Oportun Financial Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 564.00 in Oportun Financial Corp on August 29, 2024 and sell it today you would lose (169.00) from holding Oportun Financial Corp or give up 29.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLM Corp Pb vs. Oportun Financial Corp
Performance |
| Timeline |
| SLM Corp Pb |
| Oportun Financial Corp |
SLM Corp and Oportun Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLM Corp and Oportun Financial
The main advantage of trading using opposite SLM Corp and Oportun Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLM Corp position performs unexpectedly, Oportun 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 Oportun Financial will offset losses from the drop in Oportun Financial's long position.| SLM Corp vs. Capital One Financial | SLM Corp vs. Capital One Financial | SLM Corp vs. Citizens Financial Group | SLM Corp vs. Wells Fargo |
| Oportun Financial vs. SLM Corp | Oportun Financial vs. Orix Corp Ads | Oportun Financial vs. FirstCash | Oportun Financial vs. Medallion 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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