JPMorgan analyst Richard Shane offers investors consumer finance pair trade ideas heading into the Spring. The analyst is forecasting a "cyclical deterioration" of credit across asset classes, but says the differential between base and worst case has narrowed materially in the past eight weeks. As such, the firm sees a more balanced risk/reward scenario and recommends that investors focus on "risk neutral opportunities." It offers three thematic pair trades with a time horizon of 3-6 months: long OneMain Holdings (OMF) against short American Express (AXP), long Essent Group (ESNT) against short Ally Financial (ALLY), and long AGNC Investment (AGNC) against short Annaly Capital (NLY.
Published first on TheFly
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