Correlation Between LOANDEPOT INC and Imperial Metals

Can any of the company-specific risk be diversified away by investing in both LOANDEPOT INC and Imperial Metals 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 Imperial Metals 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 Imperial Metals, you can compare the effects of market volatilities on LOANDEPOT INC and Imperial Metals 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 Imperial Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of LOANDEPOT INC and Imperial Metals.

Diversification Opportunities for LOANDEPOT INC and Imperial Metals

-0.32

Correlation Coefficient

LOANDEPOT INC  Imperial Metals

Very good diversification

The 3 months correlation between LOANDEPOT and Imperial is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding LOANDEPOT INC A and Imperial Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imperial Metals 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 Imperial Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imperial Metals has no effect on the direction of LOANDEPOT INC i.e., LOANDEPOT INC and Imperial Metals go up and down completely randomly.

Pair Corralation between LOANDEPOT INC and Imperial Metals

Assuming the 90 days horizon LOANDEPOT INC A is expected to under-perform the Imperial Metals. In addition to that, LOANDEPOT INC is 1.48 times more volatile than Imperial Metals. It trades about -0.09 of its total potential returns per unit of risk. Imperial Metals is currently generating about 0.14 per unit of volatility. If you would invest  128.00  in Imperial Metals on December 23, 2024 and sell it today you would earn a total of  36.00  from holding Imperial Metals or generate 28.13% return on investment over 90 days.

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

LOANDEPOT INC A  vs.  Imperial Metals

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.

Imperial Metals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Imperial Metals are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Imperial Metals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LOANDEPOT INC and Imperial Metals

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

The idea behind LOANDEPOT INC A and Imperial Metals 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.