Correlation Between Mr Cooper and MCAN Mortgage
Can any of the company-specific risk be diversified away by investing in both Mr Cooper and MCAN Mortgage 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 MCAN Mortgage 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 MCAN Mortgage, you can compare the effects of market volatilities on Mr Cooper and MCAN Mortgage 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 MCAN Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mr Cooper and MCAN Mortgage.
Diversification Opportunities for Mr Cooper and MCAN Mortgage
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between COOP and MCAN is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Mr Cooper Group and MCAN Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCAN Mortgage 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 MCAN Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCAN Mortgage has no effect on the direction of Mr Cooper i.e., Mr Cooper and MCAN Mortgage go up and down completely randomly.
Pair Corralation between Mr Cooper and MCAN Mortgage
Given the investment horizon of 90 days Mr Cooper Group is expected to generate 2.78 times more return on investment than MCAN Mortgage. However, Mr Cooper is 2.78 times more volatile than MCAN Mortgage. It trades about 0.09 of its potential returns per unit of risk. MCAN Mortgage is currently generating about 0.1 per unit of risk. If you would invest 9,060 in Mr Cooper Group on September 4, 2024 and sell it today you would earn a total of 580.00 from holding Mr Cooper Group or generate 6.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Mr Cooper Group vs. MCAN Mortgage
Performance |
| Timeline |
| Mr Cooper Group |
| MCAN Mortgage |
Mr Cooper and MCAN Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mr Cooper and MCAN Mortgage
The main advantage of trading using opposite Mr Cooper and MCAN Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mr Cooper position performs unexpectedly, MCAN Mortgage 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 MCAN Mortgage will offset losses from the drop in MCAN Mortgage's long position.| Mr Cooper vs. Guild Holdings Co | Mr Cooper vs. Encore Capital Group | Mr Cooper vs. CNFinance Holdings | Mr Cooper vs. Velocity Financial Llc |
| MCAN Mortgage vs. Western Asset Global | MCAN Mortgage vs. Invesco Trust For | MCAN Mortgage vs. Logan Ridge Finance | MCAN Mortgage vs. Invesco Advantage MIT |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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