Correlation Between Mr Cooper and Rocket Companies
Can any of the company-specific risk be diversified away by investing in both Mr Cooper and Rocket Companies 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 Rocket Companies 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 Rocket Companies, you can compare the effects of market volatilities on Mr Cooper and Rocket Companies 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 Rocket Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mr Cooper and Rocket Companies.
Diversification Opportunities for Mr Cooper and Rocket Companies
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between COOP and Rocket is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Mr Cooper Group and Rocket Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rocket Companies 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 Rocket Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rocket Companies has no effect on the direction of Mr Cooper i.e., Mr Cooper and Rocket Companies go up and down completely randomly.
Pair Corralation between Mr Cooper and Rocket Companies
Given the investment horizon of 90 days Mr Cooper Group is expected to generate 0.64 times more return on investment than Rocket Companies. However, Mr Cooper Group is 1.56 times less risky than Rocket Companies. It trades about 0.19 of its potential returns per unit of risk. Rocket Companies is currently generating about -0.22 per unit of risk. If you would invest 9,147 in Mr Cooper Group on August 29, 2024 and sell it today you would earn a total of 682.00 from holding Mr Cooper Group or generate 7.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mr Cooper Group vs. Rocket Companies
Performance |
| Timeline |
| Mr Cooper Group |
| Rocket Companies |
Mr Cooper and Rocket Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mr Cooper and Rocket Companies
The main advantage of trading using opposite Mr Cooper and Rocket Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mr Cooper position performs unexpectedly, Rocket Companies 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 Rocket Companies will offset losses from the drop in Rocket Companies' 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 |
| Rocket Companies vs. National Bank Holdings | Rocket Companies vs. Community West Bancshares | Rocket Companies vs. Financial Institutions | Rocket Companies vs. Kearny Financial Corp |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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