Correlation Between Xp and OneMain Holdings
Can any of the company-specific risk be diversified away by investing in both Xp and OneMain Holdings 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 Xp and OneMain Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xp Inc and OneMain Holdings, you can compare the effects of market volatilities on Xp and OneMain Holdings 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 Xp with a short position of OneMain Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xp and OneMain Holdings.
Diversification Opportunities for Xp and OneMain Holdings
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xp and OneMain is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Xp Inc and OneMain Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OneMain Holdings and Xp 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 Xp Inc are associated (or correlated) with OneMain Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OneMain Holdings has no effect on the direction of Xp i.e., Xp and OneMain Holdings go up and down completely randomly.
Pair Corralation between Xp and OneMain Holdings
Allowing for the 90-day total investment horizon Xp Inc is expected to under-perform the OneMain Holdings. In addition to that, Xp is 1.02 times more volatile than OneMain Holdings. It trades about -0.27 of its total potential returns per unit of risk. OneMain Holdings is currently generating about 0.35 per unit of volatility. If you would invest 4,658 in OneMain Holdings on August 30, 2024 and sell it today you would earn a total of 1,039 from holding OneMain Holdings or generate 22.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xp Inc vs. OneMain Holdings
Performance |
| Timeline |
| Xp Inc |
| OneMain Holdings |
Xp and OneMain Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xp and OneMain Holdings
The main advantage of trading using opposite Xp and OneMain Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xp position performs unexpectedly, OneMain Holdings 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 OneMain Holdings will offset losses from the drop in OneMain Holdings' long position.| Xp vs. Raymond James Financial | Xp vs. Selective Insurance Group | Xp vs. Reinsurance Group of | Xp vs. Houlihan Lokey |
| OneMain Holdings vs. Oaktree Specialty Lending | OneMain Holdings vs. Barings BDC | OneMain Holdings vs. Runway Growth Finance | OneMain Holdings vs. Ally Financial |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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