Correlation Between Mr Cooper and Velocity Financial
Can any of the company-specific risk be diversified away by investing in both Mr Cooper and Velocity Financial 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 Velocity Financial 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 Velocity Financial Llc, you can compare the effects of market volatilities on Mr Cooper and Velocity Financial 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 Velocity Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mr Cooper and Velocity Financial.
Diversification Opportunities for Mr Cooper and Velocity Financial
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between COOP and Velocity is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Mr Cooper Group and Velocity Financial Llc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Velocity Financial Llc 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 Velocity Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Velocity Financial Llc has no effect on the direction of Mr Cooper i.e., Mr Cooper and Velocity Financial go up and down completely randomly.
Pair Corralation between Mr Cooper and Velocity Financial
Given the investment horizon of 90 days Mr Cooper Group is expected to generate 1.76 times more return on investment than Velocity Financial. However, Mr Cooper is 1.76 times more volatile than Velocity Financial Llc. It trades about 0.1 of its potential returns per unit of risk. Velocity Financial Llc is currently generating about -0.01 per unit of risk. If you would invest 9,163 in Mr Cooper Group on November 2, 2024 and sell it today you would earn a total of 1,542 from holding Mr Cooper Group or generate 16.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.04% |
| Values | Daily Returns |
Mr Cooper Group vs. Velocity Financial Llc
Performance |
| Timeline |
| Mr Cooper Group |
| Velocity Financial Llc |
Mr Cooper and Velocity Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mr Cooper and Velocity Financial
The main advantage of trading using opposite Mr Cooper and Velocity Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mr Cooper position performs unexpectedly, Velocity Financial 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 Velocity Financial will offset losses from the drop in Velocity Financial's long position.| Mr Cooper vs. Guild Holdings Co | Mr Cooper vs. Security National Financial | Mr Cooper vs. Encore Capital Group |
| Velocity Financial vs. Guild Holdings Co | Velocity Financial vs. Mr Cooper Group | Velocity Financial vs. Encore Capital Group | Velocity Financial vs. CNFinance Holdings |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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