Correlation Between NYSE Composite and Mr Cooper
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Mr Cooper 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 NYSE Composite and Mr Cooper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Mr Cooper Group, you can compare the effects of market volatilities on NYSE Composite and Mr Cooper 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 NYSE Composite with a short position of Mr Cooper. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Mr Cooper.
Diversification Opportunities for NYSE Composite and Mr Cooper
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and COOP is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Mr Cooper Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mr Cooper Group and NYSE Composite 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 NYSE Composite are associated (or correlated) with Mr Cooper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mr Cooper Group has no effect on the direction of NYSE Composite i.e., NYSE Composite and Mr Cooper go up and down completely randomly.
Pair Corralation between NYSE Composite and Mr Cooper
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.13 times less return on investment than Mr Cooper. But when comparing it to its historical volatility, NYSE Composite is 2.87 times less risky than Mr Cooper. It trades about 0.29 of its potential returns per unit of risk. Mr Cooper Group is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 9,052 in Mr Cooper Group on August 31, 2024 and sell it today you would earn a total of 781.00 from holding Mr Cooper Group or generate 8.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Mr Cooper Group
Performance |
| Timeline |
NYSE Composite and Mr Cooper Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Mr Cooper Group
Pair trading matchups for Mr Cooper
Pair Trading with NYSE Composite and Mr Cooper
The main advantage of trading using opposite NYSE Composite and Mr Cooper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Mr Cooper 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 Mr Cooper will offset losses from the drop in Mr Cooper's long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Mr Cooper vs. Guild Holdings Co | Mr Cooper vs. Encore Capital Group | Mr Cooper vs. CNFinance Holdings | Mr Cooper vs. Velocity Financial Llc |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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