Correlation Between LendingTree and LOANDEPOT INC
Can any of the company-specific risk be diversified away by investing in both LendingTree and LOANDEPOT INC 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 LOANDEPOT INC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LendingTree and LOANDEPOT INC A, you can compare the effects of market volatilities on LendingTree and LOANDEPOT INC 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 LOANDEPOT INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of LendingTree and LOANDEPOT INC.
Diversification Opportunities for LendingTree and LOANDEPOT INC
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between LendingTree and LOANDEPOT is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding LendingTree and LOANDEPOT INC A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOANDEPOT INC A 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 LOANDEPOT INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOANDEPOT INC A has no effect on the direction of LendingTree i.e., LendingTree and LOANDEPOT INC go up and down completely randomly.
Pair Corralation between LendingTree and LOANDEPOT INC
Assuming the 90 days horizon LendingTree is expected to generate 0.81 times more return on investment than LOANDEPOT INC. However, LendingTree is 1.24 times less risky than LOANDEPOT INC. It trades about 0.05 of its potential returns per unit of risk. LOANDEPOT INC A is currently generating about 0.02 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LendingTree vs. LOANDEPOT INC A
Performance |
| Timeline |
| LendingTree |
| LOANDEPOT INC A |
LendingTree and LOANDEPOT INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LendingTree and LOANDEPOT INC
The main advantage of trading using opposite LendingTree and LOANDEPOT INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LendingTree position performs unexpectedly, LOANDEPOT INC 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 LOANDEPOT INC will offset losses from the drop in LOANDEPOT INC's long position.| LendingTree vs. LOANDEPOT INC A | LendingTree vs. Superior Plus Corp | LendingTree vs. NMI Holdings | LendingTree vs. Origin Agritech |
| LOANDEPOT INC vs. Superior Plus Corp | LOANDEPOT INC vs. NMI Holdings | LOANDEPOT INC vs. Origin Agritech | LOANDEPOT INC vs. SIVERS SEMICONDUCTORS AB |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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