Correlation Between OppFi and PRA

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

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

Diversification Opportunities for OppFi and PRA

-0.42

Correlation Coefficient

OppFi  PRA

Very good diversification

The 3 months correlation between OppFi and PRA is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding OppFi Inc and PRA Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PRA Group 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 PRA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PRA Group has no effect on the direction of OppFi i.e., OppFi and PRA go up and down completely randomly.

Pair Corralation between OppFi and PRA

Given the investment horizon of 90 days OppFi Inc is expected to under-perform the PRA. In addition to that, OppFi is 1.36 times more volatile than PRA Group. It trades about -0.01 of its total potential returns per unit of risk. PRA Group is currently generating about 0.11 per unit of volatility. If you would invest  1,328  in PRA Group on May 7, 2025 and sell it today you would earn a total of  235.00  from holding PRA Group or generate 17.7% return on investment over 90 days.

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

OppFi Inc  vs.  PRA Group

OppFi Inc

Risk-Adjusted Performance

Insignificant

Over the last 90 days OppFi Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, OppFi is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

PRA Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PRA Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, PRA sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with OppFi and PRA

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

The idea behind OppFi Inc and PRA Group 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.