Correlation Between Rithm Capital and STATE
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By analyzing existing cross correlation between Rithm Capital Corp and STATE STREET P, you can compare the effects of market volatilities on Rithm Capital and STATE 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 Rithm Capital with a short position of STATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rithm Capital and STATE.
Diversification Opportunities for Rithm Capital and STATE
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Rithm and STATE is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Rithm Capital Corp and STATE STREET P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STATE STREET P and Rithm Capital 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 Rithm Capital Corp are associated (or correlated) with STATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STATE STREET P has no effect on the direction of Rithm Capital i.e., Rithm Capital and STATE go up and down completely randomly.
Pair Corralation between Rithm Capital and STATE
Assuming the 90 days trading horizon Rithm Capital is expected to generate 1.75 times less return on investment than STATE. But when comparing it to its historical volatility, Rithm Capital Corp is 2.89 times less risky than STATE. It trades about 0.3 of its potential returns per unit of risk. STATE STREET P is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 8,484 in STATE STREET P on October 25, 2024 and sell it today you would earn a total of 272.00 from holding STATE STREET P or generate 3.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.0% |
| Values | Daily Returns |
Rithm Capital Corp vs. STATE STREET P
Performance |
| Timeline |
| Rithm Capital Corp |
| STATE STREET P |
Rithm Capital and STATE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rithm Capital and STATE
The main advantage of trading using opposite Rithm Capital and STATE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rithm Capital position performs unexpectedly, STATE 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 STATE will offset losses from the drop in STATE's long position.| Rithm Capital vs. Rithm Capital Corp | Rithm Capital vs. Rithm Capital Corp | Rithm Capital vs. Rithm Capital Corp | Rithm Capital vs. PennyMac Mortgage Investment |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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