Correlation Between Loandepot and Velocity Financial
Can any of the company-specific risk be diversified away by investing in both Loandepot and Velocity Financial 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 and Velocity Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loandepot and Velocity Financial Llc, you can compare the effects of market volatilities on Loandepot and Velocity Financial 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 with a short position of Velocity Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loandepot and Velocity Financial.
Diversification Opportunities for Loandepot and Velocity Financial
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Loandepot and Velocity is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Loandepot and Velocity Financial Llc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Velocity Financial Llc and Loandepot 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 are associated (or correlated) with Velocity Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Velocity Financial Llc has no effect on the direction of Loandepot i.e., Loandepot and Velocity Financial go up and down completely randomly.
Pair Corralation between Loandepot and Velocity Financial
Considering the 90-day investment horizon Loandepot is expected to under-perform the Velocity Financial. In addition to that, Loandepot is 2.92 times more volatile than Velocity Financial Llc. It trades about -0.17 of its total potential returns per unit of risk. Velocity Financial Llc is currently generating about -0.14 per unit of volatility. If you would invest 2,062 in Velocity Financial Llc on December 1, 2024 and sell it today you would lose (178.00) from holding Velocity Financial Llc or give up 8.63% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Loandepot vs. Velocity Financial Llc
Performance |
Timeline |
Loandepot |
Velocity Financial Llc |
Loandepot and Velocity Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Loandepot and Velocity Financial
The main advantage of trading using opposite Loandepot and Velocity Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loandepot position performs unexpectedly, Velocity Financial 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 Velocity Financial will offset losses from the drop in Velocity Financial's long position.Loandepot vs. CNFinance Holdings | Loandepot vs. Security National Financial | Loandepot vs. Encore Capital Group | Loandepot vs. UWM Holdings Corp |
Velocity Financial vs. Guild Holdings Co | Velocity Financial vs. Mr Cooper Group | Velocity Financial vs. Encore Capital Group | Velocity Financial vs. CNFinance Holdings |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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