Correlation Between LOANDEPOT INC and Aurubis AG

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

Diversification Opportunities for LOANDEPOT INC and Aurubis AG

0.12

Correlation Coefficient

LOANDEPOT INC  Aurubis AG

Average diversification

The 3 months correlation between LOANDEPOT and Aurubis is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding LOANDEPOT INC A and Aurubis AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurubis AG 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 Aurubis AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurubis AG has no effect on the direction of LOANDEPOT INC i.e., LOANDEPOT INC and Aurubis AG go up and down completely randomly.

Pair Corralation between LOANDEPOT INC and Aurubis AG

Assuming the 90 days horizon LOANDEPOT INC A is expected to under-perform the Aurubis AG. In addition to that, LOANDEPOT INC is 1.25 times more volatile than Aurubis AG. It trades about -0.03 of its total potential returns per unit of risk. Aurubis AG is currently generating about 0.0 per unit of volatility. If you would invest  7,900  in Aurubis AG on September 20, 2024 and sell it today you would lose (30.00) from holding Aurubis AG or give up 0.38% of portfolio value over 90 days.

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

LOANDEPOT INC A  vs.  Aurubis AG

LOANDEPOT INC A

Risk-Adjusted Performance

0 of 100

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 latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Aurubis AG

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aurubis AG are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Aurubis AG reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LOANDEPOT INC and Aurubis AG

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

The idea behind LOANDEPOT INC A and Aurubis AG 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.

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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.