Correlation Between LOANDEPOT INC and Global Ship

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

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

Diversification Opportunities for LOANDEPOT INC and Global Ship

-0.44

Correlation Coefficient

LOANDEPOT INC  Global Ship

Very good diversification

The 3 months correlation between LOANDEPOT and Global is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding LOANDEPOT INC A and Global Ship Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Ship Lease and LOANDEPOT INC 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 LOANDEPOT INC A are associated (or correlated) with Global Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Ship Lease has no effect on the direction of LOANDEPOT INC i.e., LOANDEPOT INC and Global Ship go up and down completely randomly.

Pair Corralation between LOANDEPOT INC and Global Ship

Assuming the 90 days horizon LOANDEPOT INC A is expected to under-perform the Global Ship. In addition to that, LOANDEPOT INC is 2.46 times more volatile than Global Ship Lease. It trades about -0.09 of its total potential returns per unit of risk. Global Ship Lease is currently generating about 0.06 per unit of volatility. If you would invest  2,002  in Global Ship Lease on December 22, 2024 and sell it today you would earn a total of  116.00  from holding Global Ship Lease or generate 5.79% return on investment over 90 days.

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

LOANDEPOT INC A  vs.  Global Ship Lease

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.

Global Ship Lease

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Global Ship Lease are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Global Ship may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with LOANDEPOT INC and Global Ship

The main advantage of trading using opposite LOANDEPOT INC and Global Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LOANDEPOT INC position performs unexpectedly, Global Ship 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 Global Ship will offset losses from the drop in Global Ship's long position.

The idea behind LOANDEPOT INC A and Global Ship Lease 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.