Correlation Between Bm Technologies and OppFi

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

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

Diversification Opportunities for Bm Technologies and OppFi

0.25

Correlation Coefficient

Bm Technologies  OppFi

Modest diversification

The 3 months correlation between BMTX and OppFi is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Bm Technologies and OppFi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OppFi Inc and Bm Technologies 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 Bm Technologies are associated (or correlated) with OppFi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OppFi Inc has no effect on the direction of Bm Technologies i.e., Bm Technologies and OppFi go up and down completely randomly.

Pair Corralation between Bm Technologies and OppFi

Given the investment horizon of 90 days Bm Technologies is expected to generate 1.46 times more return on investment than OppFi. However, Bm Technologies is 1.46 times more volatile than OppFi Inc. It trades about 0.13 of its potential returns per unit of risk. OppFi Inc is currently generating about 0.04 per unit of risk. If you would invest  175.00  in Bm Technologies on February 23, 2024 and sell it today you would earn a total of  130.00  from holding Bm Technologies or generate 74.29% return on investment over 90 days.

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

Bm Technologies  vs.  OppFi Inc

Bm Technologies

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bm Technologies are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Bm Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

OppFi Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in OppFi Inc are ranked lower than 3 (%) 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.

Pair Trading with Bm Technologies and OppFi

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

The idea behind Bm Technologies and OppFi Inc 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.