Correlation Between LendingTree and FIRST NATIONAL
Can any of the company-specific risk be diversified away by investing in both LendingTree and FIRST NATIONAL 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 LendingTree and FIRST NATIONAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LendingTree and FIRST NATIONAL FIN, you can compare the effects of market volatilities on LendingTree and FIRST NATIONAL 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 LendingTree with a short position of FIRST NATIONAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of LendingTree and FIRST NATIONAL.
Diversification Opportunities for LendingTree and FIRST NATIONAL
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between LendingTree and FIRST is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding LendingTree and FIRST NATIONAL FIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST NATIONAL FIN and LendingTree 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 LendingTree are associated (or correlated) with FIRST NATIONAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST NATIONAL FIN has no effect on the direction of LendingTree i.e., LendingTree and FIRST NATIONAL go up and down completely randomly.
Pair Corralation between LendingTree and FIRST NATIONAL
Assuming the 90 days horizon LendingTree is expected to generate 1.82 times more return on investment than FIRST NATIONAL. However, LendingTree is 1.82 times more volatile than FIRST NATIONAL FIN. It trades about 0.05 of its potential returns per unit of risk. FIRST NATIONAL FIN is currently generating about 0.05 per unit of risk. If you would invest 3,240 in LendingTree on August 27, 2024 and sell it today you would earn a total of 846.00 from holding LendingTree or generate 26.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LendingTree vs. FIRST NATIONAL FIN
Performance |
| Timeline |
| LendingTree |
| FIRST NATIONAL FIN |
LendingTree and FIRST NATIONAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LendingTree and FIRST NATIONAL
The main advantage of trading using opposite LendingTree and FIRST NATIONAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LendingTree position performs unexpectedly, FIRST NATIONAL 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 FIRST NATIONAL will offset losses from the drop in FIRST NATIONAL's long position.| LendingTree vs. LOANDEPOT INC A | LendingTree vs. Superior Plus Corp | LendingTree vs. NMI Holdings | LendingTree vs. Origin Agritech |
| FIRST NATIONAL vs. FUYO GENERAL LEASE | FIRST NATIONAL vs. JJ SNACK FOODS | FIRST NATIONAL vs. Air Lease | FIRST NATIONAL vs. KAUFMAN ET BROAD |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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