Correlation Between Federal Agricultural and Loandepot
Can any of the company-specific risk be diversified away by investing in both Federal Agricultural and Loandepot 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 Federal Agricultural and Loandepot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federal Agricultural Mortgage and Loandepot, you can compare the effects of market volatilities on Federal Agricultural and Loandepot 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 Federal Agricultural with a short position of Loandepot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Agricultural and Loandepot.
Diversification Opportunities for Federal Agricultural and Loandepot
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Federal and Loandepot is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Federal Agricultural Mortgage and Loandepot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loandepot and Federal Agricultural 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 Federal Agricultural Mortgage are associated (or correlated) with Loandepot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loandepot has no effect on the direction of Federal Agricultural i.e., Federal Agricultural and Loandepot go up and down completely randomly.
Pair Corralation between Federal Agricultural and Loandepot
Considering the 90-day investment horizon Federal Agricultural Mortgage is expected to generate 0.41 times more return on investment than Loandepot. However, Federal Agricultural Mortgage is 2.43 times less risky than Loandepot. It trades about 0.07 of its potential returns per unit of risk. Loandepot is currently generating about 0.02 per unit of risk. If you would invest 10,829 in Federal Agricultural Mortgage on September 26, 2024 and sell it today you would earn a total of 8,895 from holding Federal Agricultural Mortgage or generate 82.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Federal Agricultural Mortgage vs. Loandepot
Performance |
Timeline |
Federal Agricultural |
Loandepot |
Federal Agricultural and Loandepot Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Federal Agricultural and Loandepot
The main advantage of trading using opposite Federal Agricultural and Loandepot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Agricultural position performs unexpectedly, Loandepot 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 will offset losses from the drop in Loandepot's long position.Federal Agricultural vs. Loandepot | Federal Agricultural vs. Mr Cooper Group | Federal Agricultural vs. PennyMac Finl Svcs | Federal Agricultural vs. Guild Holdings Co |
Loandepot vs. Mr Cooper Group | Loandepot vs. Encore Capital Group | Loandepot vs. CNFinance Holdings | Loandepot vs. Security National 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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