Correlation Between Oportun Financial and Mars Acquisition

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

By analyzing existing cross correlation between Oportun Financial Corp and Mars Acquisition Corp, you can compare the effects of market volatilities on Oportun Financial and Mars Acquisition 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 Oportun Financial with a short position of Mars Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oportun Financial and Mars Acquisition.

Diversification Opportunities for Oportun Financial and Mars Acquisition

-0.59

Correlation Coefficient

Oportun Financial  Mars Acquisition

Excellent diversification

The 3 months correlation between Oportun and Mars is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Oportun Financial Corp and Mars Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mars Acquisition Corp and Oportun Financial 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 Oportun Financial Corp are associated (or correlated) with Mars Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mars Acquisition Corp has no effect on the direction of Oportun Financial i.e., Oportun Financial and Mars Acquisition go up and down completely randomly.

Pair Corralation between Oportun Financial and Mars Acquisition

Given the investment horizon of 90 days Oportun Financial Corp is expected to generate 0.44 times more return on investment than Mars Acquisition. However, Oportun Financial Corp is 2.26 times less risky than Mars Acquisition. It trades about 0.1 of its potential returns per unit of risk. Mars Acquisition Corp is currently generating about -0.06 per unit of risk. If you would invest  270.00  in Oportun Financial Corp on October 7, 2024 and sell it today you would earn a total of  130.00  from holding Oportun Financial Corp or generate 48.15% return on investment over 90 days.

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

Oportun Financial Corp  vs.  Mars Acquisition Corp

Oportun Financial Corp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oportun Financial Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Oportun Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

Mars Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mars Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Oportun Financial and Mars Acquisition

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

The idea behind Oportun Financial Corp and Mars Acquisition Corp 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.