Correlation Between OppFi and Banco De

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

By analyzing existing cross correlation between OppFi Inc and Banco de Sabadell, you can compare the effects of market volatilities on OppFi and Banco De 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 OppFi with a short position of Banco De. Check out your portfolio center. Please also check ongoing floating volatility patterns of OppFi and Banco De.

Diversification Opportunities for OppFi and Banco De

0.36

Correlation Coefficient

OppFi  Banco De

Weak diversification

The 3 months correlation between OppFi and Banco is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding OppFi Inc and Banco de Sabadell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco de Sabadell and OppFi 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 OppFi Inc are associated (or correlated) with Banco De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco de Sabadell has no effect on the direction of OppFi i.e., OppFi and Banco De go up and down completely randomly.

Pair Corralation between OppFi and Banco De

Given the investment horizon of 90 days OppFi is expected to generate 1.01 times less return on investment than Banco De. In addition to that, OppFi is 1.87 times more volatile than Banco de Sabadell. It trades about 0.1 of its total potential returns per unit of risk. Banco de Sabadell is currently generating about 0.19 per unit of volatility. If you would invest  365.00  in Banco de Sabadell on December 2, 2024 and sell it today you would earn a total of  135.00  from holding Banco de Sabadell or generate 36.99% return on investment over 90 days.

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

OppFi Inc  vs.  Banco de Sabadell

OppFi Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in OppFi Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady technical and fundamental indicators, OppFi demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Banco de Sabadell

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Banco de Sabadell are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Banco De showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with OppFi and Banco De

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

The idea behind OppFi Inc and Banco de Sabadell 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.