Correlation Between CNFinance Holdings and Mr Cooper
Can any of the company-specific risk be diversified away by investing in both CNFinance Holdings and Mr Cooper 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 CNFinance Holdings and Mr Cooper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNFinance Holdings and Mr Cooper Group, you can compare the effects of market volatilities on CNFinance Holdings and Mr Cooper 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 CNFinance Holdings with a short position of Mr Cooper. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNFinance Holdings and Mr Cooper.
Diversification Opportunities for CNFinance Holdings and Mr Cooper
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CNFinance and COOP is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding CNFinance Holdings and Mr Cooper Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mr Cooper Group and CNFinance Holdings 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 CNFinance Holdings are associated (or correlated) with Mr Cooper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mr Cooper Group has no effect on the direction of CNFinance Holdings i.e., CNFinance Holdings and Mr Cooper go up and down completely randomly.
Pair Corralation between CNFinance Holdings and Mr Cooper
Considering the 90-day investment horizon CNFinance Holdings is expected to generate 1.05 times less return on investment than Mr Cooper. In addition to that, CNFinance Holdings is 3.77 times more volatile than Mr Cooper Group. It trades about 0.04 of its total potential returns per unit of risk. Mr Cooper Group is currently generating about 0.16 per unit of volatility. If you would invest 10,368 in Mr Cooper Group on November 18, 2024 and sell it today you would earn a total of 418.00 from holding Mr Cooper Group or generate 4.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNFinance Holdings vs. Mr Cooper Group
Performance |
| Timeline |
| CNFinance Holdings |
| Mr Cooper Group |
CNFinance Holdings and Mr Cooper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNFinance Holdings and Mr Cooper
The main advantage of trading using opposite CNFinance Holdings and Mr Cooper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNFinance Holdings position performs unexpectedly, Mr Cooper 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 Mr Cooper will offset losses from the drop in Mr Cooper's long position.| CNFinance Holdings vs. Guild Holdings Co | CNFinance Holdings vs. PennyMac Finl Svcs | CNFinance Holdings vs. Security National Financial | CNFinance Holdings vs. Encore Capital Group |
| Mr Cooper vs. Guild Holdings Co | Mr Cooper vs. Encore Capital Group | Mr Cooper vs. CNFinance Holdings | Mr Cooper vs. Velocity Financial Llc |
Check out your portfolio center.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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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