Correlation Between Mr Cooper and John Hancock

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Can any of the company-specific risk be diversified away by investing in both Mr Cooper and John Hancock 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 Mr Cooper and John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mr Cooper Group and John Hancock Income, you can compare the effects of market volatilities on Mr Cooper and John Hancock 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 Mr Cooper with a short position of John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mr Cooper and John Hancock.

Diversification Opportunities for Mr Cooper and John Hancock

COOPJohnDiversified AwayCOOPJohnDiversified Away100%
-0.15
  Correlation Coefficient

Good diversification

The 3 months correlation between COOP and John is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Mr Cooper Group and John Hancock Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Income and Mr Cooper 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 Mr Cooper Group are associated (or correlated) with John Hancock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Hancock Income has no effect on the direction of Mr Cooper i.e., Mr Cooper and John Hancock go up and down completely randomly.

Pair Corralation between Mr Cooper and John Hancock

Given the investment horizon of 90 days Mr Cooper Group is expected to generate 2.96 times more return on investment than John Hancock. However, Mr Cooper is 2.96 times more volatile than John Hancock Income. It trades about 0.13 of its potential returns per unit of risk. John Hancock Income is currently generating about 0.05 per unit of risk. If you would invest  3,988  in Mr Cooper Group on November 30, 2024 and sell it today you would earn a total of  7,161  from holding Mr Cooper Group or generate 179.56% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.8%
ValuesDaily Returns

Mr Cooper Group  vs.  John Hancock Income

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-50
JavaScript chart by amCharts 3.21.15COOP JHS
       Timeline  
Mr Cooper Group 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Mr Cooper Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Mr Cooper reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb9095100105110
John Hancock Income 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in John Hancock Income are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical indicators, John Hancock is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb10.91111.111.211.311.411.5

Mr Cooper and John Hancock Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.67-3.5-2.33-1.150.01.222.483.745.06.26 0.51.01.52.0
JavaScript chart by amCharts 3.21.15COOP JHS
       Returns  

Pair Trading with Mr Cooper and John Hancock

The main advantage of trading using opposite Mr Cooper and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mr Cooper position performs unexpectedly, John Hancock 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 John Hancock will offset losses from the drop in John Hancock's long position.
The idea behind Mr Cooper Group and John Hancock Income 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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