Should you purchase Loandepot after the current volatility rise?

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LDI Stock  USD 1.65  0.09  5.17%   
Ellen Johnson
By Ellen Johnson
Macroaxis Story
It seems as Loandepot may not recover as fast as we have hopped for as its price went down 0.71% today. Loandepot current daily volatility is 5.24 percent, with a beta of 1.92 and an alpha of 0.73 over Dow Jones Industrial. While some millenniums are indifferent towards current market swings, it makes sense to concentrate on Loandepot based on its technical indicators. I will address the reasons why this entity does not get much respect from stockholders under the current market uncertainty.
Published over a month ago
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Reviewed by Raphi Shpitalnik

The company runs under Financial Services sector within Mortgage Finance industry.
We provide investment recommendation to complement the last-minute expert consensus on Loandepot. Our dynamic recommendation engine harnesses a multidimensional algorithm to analyze the entity's potential to grow using all technical and fundamental data available at the time.
Investing in Loandepot, just like investing in any other equity instrument, is characterized by a strong risk-return correlation. High risks mean high returns and low risk means lower expected returns. Risk management is the act of identifying and assessing the potential risk and developing strategies to minimize these risks and earn maximum possible profits while holding Loandepot along with other instruments in the same portfolio. Using conventional technical analysis and fundamental analysis to select individual securities into a portfolio complements risk management and adds value to overall investors' investing strategies.
Sophisticated investors, who have witnessed many market ups and downs, frequently view the market will even out over time. This tendency of Loandepot's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy. Please use the tools below to analyze the current value of Loandepot in the context of predictive analytics.
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Please note, it is not enough to conduct a financial or market analysis of a single entity such as Loandepot. Your research has to be compared to or analyzed against Loandepot's peers to derive any actionable benefits. When done correctly, Loandepot's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy towards taking a position in Loandepot.

How important is Loandepot's Liquidity

Loandepot financial leverage refers to using borrowed capital as a funding source to finance Loandepot ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Loandepot financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Loandepot's total debt and its cash.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions.
It is good to see analyst projects for Loandepot, but it might be worth checking our own buy vs. sell analysis

Loandepot Correlation with Peers

Investors in Loandepot can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Loandepot. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Loandepot and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Loandepot is related in some way. The cells in the table are color-coded to highlight significantly positive and negative relationships. Each cell shows the correlation between one pair of equities and can be used to run pair trading strategies or create efficient portfolios with your current brokerage.
Please check volatility of Loandepot for more details

Sale by Walsh Jeff Alexander of 63303 shares of Loandepot

Legal trades by Loandepot insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
Loandepot insider trading alert for sale of class a common stock par value 0.001 per share by Walsh Jeff Alexander, President LDI Mortgage, on 7th of March 2023. This event was filed by Loandepot Inc with SEC on 2023-03-07. Statement of changes in beneficial ownership - SEC Form 4 [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

Is Loandepot valued properly by the market?

Loandepot is unstable given 3 months investment horizon. Loandepot has Sharpe Ratio of 0.19, which conveys that the firm had 0.19% of return per unit of risk over the last 3 months. Our standpoint towards estimating the risk of a stock is to use both market data as well as company specific technical data. We were able to break down twenty-eight different technical indicators, which can help you to evaluate if expected returns of 1.01% are justified by taking the suggested risk. Use Loandepot Downside Deviation of 5.27, risk adjusted performance of 0.1705, and Mean Deviation of 4.03 to evaluate company specific risk that cannot be diversified away.
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Loandepot has a small chance to finish above USD2.84 in 2 months

Current skewness is at 0.19. Loandepot exhibits above-average semi-deviation for your current time horizon. We encourage investors to investigate Loandepot individually to make sure intended market timing strategies and available technical indicators are consistent with their estimates about Loandepot future systematic risk. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Loandepot's stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Loandepot's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Our Takeaway on Loandepot Investment

While many of the other players under the mortgage finance industry are still a bit expensive, Loandepot may offer a potential longer-term growth to stockholders. While some stockholders may not share our view we believe that the current risk-reward utility is not appealing enough to do any trading. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Loandepot.

Editorial Staff

Ellen Johnson is a Member of Macroaxis Editorial Board. Ellen covers public companies in North America, focusing primarily on valuation and volatility. Six years of experience in predictive investment analytics and risk management. View Profile
This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Ellen Johnson do not own shares of Loandepot. Please refer to our Terms of Use for any information regarding our disclosure principles.

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