Correlation Between Deutsche Pfandbriefbank and Mr Cooper
Can any of the company-specific risk be diversified away by investing in both Deutsche Pfandbriefbank 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 Deutsche Pfandbriefbank and Mr Cooper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Pfandbriefbank AG and Mr Cooper Group, you can compare the effects of market volatilities on Deutsche Pfandbriefbank 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 Deutsche Pfandbriefbank with a short position of Mr Cooper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Pfandbriefbank and Mr Cooper.
Diversification Opportunities for Deutsche Pfandbriefbank and Mr Cooper
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Deutsche and 07WA is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Pfandbriefbank AG 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 Deutsche Pfandbriefbank 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 Deutsche Pfandbriefbank AG 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 Deutsche Pfandbriefbank i.e., Deutsche Pfandbriefbank and Mr Cooper go up and down completely randomly.
Pair Corralation between Deutsche Pfandbriefbank and Mr Cooper
Assuming the 90 days trading horizon Deutsche Pfandbriefbank AG is expected to generate 1.11 times more return on investment than Mr Cooper. However, Deutsche Pfandbriefbank is 1.11 times more volatile than Mr Cooper Group. It trades about 0.24 of its potential returns per unit of risk. Mr Cooper Group is currently generating about 0.26 per unit of risk. If you would invest 474.00 in Deutsche Pfandbriefbank AG on October 20, 2024 and sell it today you would earn a total of 51.00 from holding Deutsche Pfandbriefbank AG or generate 10.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Pfandbriefbank AG vs. Mr Cooper Group
Performance |
| Timeline |
| Deutsche Pfandbriefbank |
| Mr Cooper Group |
Deutsche Pfandbriefbank and Mr Cooper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Pfandbriefbank and Mr Cooper
The main advantage of trading using opposite Deutsche Pfandbriefbank and Mr Cooper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Pfandbriefbank 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.| Deutsche Pfandbriefbank vs. Mr Cooper Group | Deutsche Pfandbriefbank vs. PennyMac Financial Services | Deutsche Pfandbriefbank vs. OSB GROUP PLC | Deutsche Pfandbriefbank vs. FIRST NATIONAL FIN |
| Mr Cooper vs. Southwest Airlines Co | Mr Cooper vs. ALTAIR RES INC | Mr Cooper vs. Nok Airlines PCL | Mr Cooper vs. SINGAPORE AIRLINES |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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