Correlation Between Fomo Worldwide and Loandepot

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

By analyzing existing cross correlation between Fomo Worldwide and Loandepot, you can compare the effects of market volatilities on Fomo Worldwide 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 Fomo Worldwide with a short position of Loandepot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fomo Worldwide and Loandepot.

Diversification Opportunities for Fomo Worldwide and Loandepot

0.02

Correlation Coefficient

Fomo Worldwide  Loandepot

Significant diversification

The 3 months correlation between Fomo and Loandepot is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Fomo Worldwide and Loandepot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loandepot and Fomo Worldwide 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 Fomo Worldwide 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 Fomo Worldwide i.e., Fomo Worldwide and Loandepot go up and down completely randomly.

Pair Corralation between Fomo Worldwide and Loandepot

Given the investment horizon of 90 days Fomo Worldwide is expected to generate 35.97 times more return on investment than Loandepot. However, Fomo Worldwide is 35.97 times more volatile than Loandepot. It trades about 0.16 of its potential returns per unit of risk. Loandepot is currently generating about -0.02 per unit of risk. If you would invest  0.60  in Fomo Worldwide on October 22, 2024 and sell it today you would lose (0.60) from holding Fomo Worldwide or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	83.47%
Values	Daily Returns

Fomo Worldwide  vs.  Loandepot

Fomo Worldwide

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fomo Worldwide are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Fomo Worldwide unveiled solid returns over the last few months and may actually be approaching a breakup point.

Loandepot

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Loandepot has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Fomo Worldwide and Loandepot

The main advantage of trading using opposite Fomo Worldwide and Loandepot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fomo Worldwide 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.

The idea behind Fomo Worldwide and Loandepot 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.