Correlation Between Postal Savings and LOANDEPOT INC

Can any of the company-specific risk be diversified away by investing in both Postal Savings 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 Postal Savings and LOANDEPOT INC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Postal Savings Bank and LOANDEPOT INC A, you can compare the effects of market volatilities on Postal Savings 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 Postal Savings with a short position of LOANDEPOT INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Postal Savings and LOANDEPOT INC.

Diversification Opportunities for Postal Savings and LOANDEPOT INC

-0.66

Correlation Coefficient

Postal Savings  LOANDEPOT INC

Excellent diversification

The 3 months correlation between Postal and LOANDEPOT is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Postal Savings Bank 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 Postal Savings 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 Postal Savings Bank 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 Postal Savings i.e., Postal Savings and LOANDEPOT INC go up and down completely randomly.

Pair Corralation between Postal Savings and LOANDEPOT INC

Assuming the 90 days horizon Postal Savings Bank is expected to generate 0.38 times more return on investment than LOANDEPOT INC. However, Postal Savings Bank is 2.66 times less risky than LOANDEPOT INC. It trades about 0.1 of its potential returns per unit of risk. LOANDEPOT INC A is currently generating about -0.12 per unit of risk. If you would invest  55.00  in Postal Savings Bank on December 28, 2024 and sell it today you would earn a total of  6.00  from holding Postal Savings Bank or generate 10.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Postal Savings Bank  vs.  LOANDEPOT INC A

Postal Savings Bank

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Postal Savings Bank are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Postal Savings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

LOANDEPOT INC A

Risk-Adjusted Performance

Very Weak

Over the last 90 days LOANDEPOT INC A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Postal Savings and LOANDEPOT INC

The main advantage of trading using opposite Postal Savings and LOANDEPOT INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postal Savings 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.

The idea behind Postal Savings Bank and LOANDEPOT INC A pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.