Correlation Between Mr Cooper and John Hancock
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
-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 Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.8% |
Values | Daily Returns |
Mr Cooper Group vs. John Hancock Income
Performance |
Timeline |
Mr Cooper Group |
John Hancock Income |
Mr Cooper and John Hancock Volatility Contrast
Predicted Return Density |
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.Mr Cooper vs. Guild Holdings Co | ||
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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 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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