Correlation Between OppFi and Vacasa
Can any of the company-specific risk be diversified away by investing in both OppFi and Vacasa 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 Vacasa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OppFi Inc and Vacasa Inc, you can compare the effects of market volatilities on OppFi and Vacasa 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 Vacasa. Check out your portfolio center. Please also check ongoing floating volatility patterns of OppFi and Vacasa.
Diversification Opportunities for OppFi and Vacasa
Excellent diversification
The 3 months correlation between OppFi and Vacasa is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding OppFi Inc and Vacasa Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vacasa Inc 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 Vacasa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vacasa Inc has no effect on the direction of OppFi i.e., OppFi and Vacasa go up and down completely randomly.
Pair Corralation between OppFi and Vacasa
Given the investment horizon of 90 days OppFi Inc is expected to generate 0.41 times more return on investment than Vacasa. However, OppFi Inc is 2.46 times less risky than Vacasa. It trades about 0.11 of its potential returns per unit of risk. Vacasa Inc is currently generating about -0.17 per unit of risk. If you would invest 301.00 in OppFi Inc on March 11, 2024 and sell it today you would earn a total of 21.00 from holding OppFi Inc or generate 6.98% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
OppFi Inc vs. Vacasa Inc
Performance |
Timeline |
OppFi Inc |
Vacasa Inc |
OppFi and Vacasa Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with OppFi and Vacasa
The main advantage of trading using opposite OppFi and Vacasa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OppFi position performs unexpectedly, Vacasa 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 Vacasa will offset losses from the drop in Vacasa's long position.OppFi vs. X Financial Class | OppFi vs. Yirendai | OppFi vs. Pintec Technology Holdings | OppFi vs. Federal Agricultural Mortgage |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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