Correlation Between LOANDEPOT INC and SIERRA METALS

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

By analyzing existing cross correlation between LOANDEPOT INC A and SIERRA METALS, you can compare the effects of market volatilities on LOANDEPOT INC and SIERRA METALS 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 LOANDEPOT INC with a short position of SIERRA METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of LOANDEPOT INC and SIERRA METALS.

Diversification Opportunities for LOANDEPOT INC and SIERRA METALS

-0.71

Correlation Coefficient

LOANDEPOT INC  SIERRA METALS

Pay attention - limited upside

The 3 months correlation between LOANDEPOT and SIERRA is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding LOANDEPOT INC A and SIERRA METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIERRA METALS and LOANDEPOT INC 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 LOANDEPOT INC A are associated (or correlated) with SIERRA METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIERRA METALS has no effect on the direction of LOANDEPOT INC i.e., LOANDEPOT INC and SIERRA METALS go up and down completely randomly.

Pair Corralation between LOANDEPOT INC and SIERRA METALS

Assuming the 90 days horizon LOANDEPOT INC A is expected to under-perform the SIERRA METALS. In addition to that, LOANDEPOT INC is 1.68 times more volatile than SIERRA METALS. It trades about -0.07 of its total potential returns per unit of risk. SIERRA METALS is currently generating about -0.01 per unit of volatility. If you would invest  55.00  in SIERRA METALS on November 23, 2024 and sell it today you would lose (1.00) from holding SIERRA METALS or give up 1.82% of portfolio value over 90 days.

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

LOANDEPOT INC A  vs.  SIERRA METALS

LOANDEPOT INC A

Risk-Adjusted Performance

Very Weak

Over the last 90 days LOANDEPOT INC A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

SIERRA METALS

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SIERRA METALS are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SIERRA METALS unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LOANDEPOT INC and SIERRA METALS

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

The idea behind LOANDEPOT INC A and SIERRA METALS 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.