Correlation Between OppFi and Unicharm

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

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

Diversification Opportunities for OppFi and Unicharm

-0.38

Correlation Coefficient

OppFi  Unicharm

Very good diversification

The 3 months correlation between OppFi and Unicharm is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding OppFi Inc and Unicharm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unicharm 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 Unicharm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unicharm has no effect on the direction of OppFi i.e., OppFi and Unicharm go up and down completely randomly.

Pair Corralation between OppFi and Unicharm

Given the investment horizon of 90 days OppFi Inc is expected to generate 1.04 times more return on investment than Unicharm. However, OppFi is 1.04 times more volatile than Unicharm. It trades about 0.09 of its potential returns per unit of risk. Unicharm is currently generating about 0.03 per unit of risk. If you would invest  790.00  in OppFi Inc on December 26, 2024 and sell it today you would earn a total of  205.00  from holding OppFi Inc or generate 25.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.08%
Values	Daily Returns

OppFi Inc  vs.  Unicharm

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.

Unicharm

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Unicharm are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting technical indicators, Unicharm may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with OppFi and Unicharm

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

The idea behind OppFi Inc and Unicharm 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.