Correlation Between Greystone Housing and Rocket Companies
Can any of the company-specific risk be diversified away by investing in both Greystone Housing 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 Greystone Housing and Rocket Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greystone Housing Impact and Rocket Companies, you can compare the effects of market volatilities on Greystone Housing 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 Greystone Housing with a short position of Rocket Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greystone Housing and Rocket Companies.
Diversification Opportunities for Greystone Housing and Rocket Companies
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Greystone and Rocket is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Greystone Housing Impact and Rocket Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rocket Companies and Greystone Housing 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 Greystone Housing Impact 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 Greystone Housing i.e., Greystone Housing and Rocket Companies go up and down completely randomly.
Pair Corralation between Greystone Housing and Rocket Companies
Considering the 90-day investment horizon Greystone Housing Impact is expected to generate 0.81 times more return on investment than Rocket Companies. However, Greystone Housing Impact is 1.24 times less risky than Rocket Companies. It trades about -0.03 of its potential returns per unit of risk. Rocket Companies is currently generating about -0.18 per unit of risk. If you would invest 1,208 in Greystone Housing Impact on August 30, 2024 and sell it today you would lose (26.00) from holding Greystone Housing Impact or give up 2.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greystone Housing Impact vs. Rocket Companies
Performance |
| Timeline |
| Greystone Housing Impact |
| Rocket Companies |
Greystone Housing and Rocket Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greystone Housing and Rocket Companies
The main advantage of trading using opposite Greystone Housing and Rocket Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greystone Housing 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.| Greystone Housing vs. Guild Holdings Co | Greystone Housing vs. Security National Financial | Greystone Housing vs. Encore Capital Group | Greystone Housing vs. PennyMac Finl Svcs |
| Rocket Companies vs. Loandepot | Rocket Companies vs. Mr Cooper Group | Rocket Companies vs. PennyMac Finl Svcs | Rocket Companies vs. Guild Holdings Co |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |