Correlation Between PennyMac Finl and Ocwen Financial
Can any of the company-specific risk be diversified away by investing in both PennyMac Finl and Ocwen 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 PennyMac Finl and Ocwen Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennyMac Finl Svcs and Ocwen Financial, you can compare the effects of market volatilities on PennyMac Finl and Ocwen 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 PennyMac Finl with a short position of Ocwen Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennyMac Finl and Ocwen Financial.
Diversification Opportunities for PennyMac Finl and Ocwen Financial
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PennyMac and Ocwen is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding PennyMac Finl Svcs and Ocwen Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocwen Financial and PennyMac Finl 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 PennyMac Finl Svcs are associated (or correlated) with Ocwen Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocwen Financial has no effect on the direction of PennyMac Finl i.e., PennyMac Finl and Ocwen Financial go up and down completely randomly.
Pair Corralation between PennyMac Finl and Ocwen Financial
If you would invest 10,203 in PennyMac Finl Svcs on August 27, 2024 and sell it today you would earn a total of 576.00 from holding PennyMac Finl Svcs or generate 5.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
PennyMac Finl Svcs vs. Ocwen Financial
Performance |
| Timeline |
| PennyMac Finl Svcs |
| Ocwen Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PennyMac Finl and Ocwen Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennyMac Finl and Ocwen Financial
The main advantage of trading using opposite PennyMac Finl and Ocwen Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennyMac Finl position performs unexpectedly, Ocwen 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 Ocwen Financial will offset losses from the drop in Ocwen Financial's long position.| PennyMac Finl vs. National Bank Holdings | PennyMac Finl vs. Community West Bancshares | PennyMac Finl vs. Financial Institutions | PennyMac Finl vs. Kearny Financial Corp |
| Ocwen Financial vs. CNFinance Holdings | Ocwen Financial vs. Security National Financial | Ocwen Financial vs. Encore Capital Group | Ocwen Financial 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.
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