Correlation Between OppFi and Mitek Systems

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

By analyzing existing cross correlation between OppFi Inc and Mitek Systems, you can compare the effects of market volatilities on OppFi and Mitek Systems 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 Mitek Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of OppFi and Mitek Systems.

Diversification Opportunities for OppFi and Mitek Systems

0.63

Correlation Coefficient

OppFi  Mitek Systems

Poor diversification

The 3 months correlation between OppFi and Mitek is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding OppFi Inc and Mitek Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitek Systems 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 Mitek Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitek Systems has no effect on the direction of OppFi i.e., OppFi and Mitek Systems go up and down completely randomly.

Pair Corralation between OppFi and Mitek Systems

Given the investment horizon of 90 days OppFi Inc is expected to generate 1.51 times more return on investment than Mitek Systems. However, OppFi is 1.51 times more volatile than Mitek Systems. It trades about 0.29 of its potential returns per unit of risk. Mitek Systems is currently generating about 0.18 per unit of risk. If you would invest  494.00  in OppFi Inc on October 6, 2024 and sell it today you would earn a total of  364.00  from holding OppFi Inc or generate 73.68% return on investment over 90 days.

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

OppFi Inc  vs.  Mitek Systems

OppFi Inc

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in OppFi Inc are ranked lower than 18 (%) 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.

Mitek Systems

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mitek Systems are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal basic indicators, Mitek Systems disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with OppFi and Mitek Systems

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

The idea behind OppFi Inc and Mitek Systems 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.