Correlation Between Guild Holdings and Rocket Companies
Can any of the company-specific risk be diversified away by investing in both Guild Holdings 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 Guild Holdings and Rocket Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guild Holdings Co and Rocket Companies, you can compare the effects of market volatilities on Guild Holdings 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 Guild Holdings with a short position of Rocket Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guild Holdings and Rocket Companies.
Diversification Opportunities for Guild Holdings and Rocket Companies
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guild and Rocket is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Guild Holdings Co and Rocket Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rocket Companies and Guild Holdings 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 Guild Holdings Co 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 Guild Holdings i.e., Guild Holdings and Rocket Companies go up and down completely randomly.
Pair Corralation between Guild Holdings and Rocket Companies
Given the investment horizon of 90 days Guild Holdings Co is expected to under-perform the Rocket Companies. In addition to that, Guild Holdings is 1.02 times more volatile than Rocket Companies. It trades about -0.14 of its total potential returns per unit of risk. Rocket Companies is currently generating about 0.28 per unit of volatility. If you would invest 1,085 in Rocket Companies on November 3, 2024 and sell it today you would earn a total of 175.00 from holding Rocket Companies or generate 16.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Guild Holdings Co vs. Rocket Companies
Performance |
| Timeline |
| Guild Holdings |
| Rocket Companies |
Guild Holdings and Rocket Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guild Holdings and Rocket Companies
The main advantage of trading using opposite Guild Holdings and Rocket Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guild Holdings 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.| Guild Holdings vs. Mr Cooper Group | Guild Holdings vs. Encore Capital Group | Guild Holdings vs. CNFinance Holdings | Guild Holdings vs. Security National Financial |
| 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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