Correlation Between Rocket Companies and Global Star
Can any of the company-specific risk be diversified away by investing in both Rocket Companies and Global Star 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 Rocket Companies and Global Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rocket Companies and Global Star Acquisition, you can compare the effects of market volatilities on Rocket Companies and Global Star 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 Rocket Companies with a short position of Global Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rocket Companies and Global Star.
Diversification Opportunities for Rocket Companies and Global Star
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Rocket and Global is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Rocket Companies and Global Star Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Star Acquisition and Rocket Companies 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 Rocket Companies are associated (or correlated) with Global Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Star Acquisition has no effect on the direction of Rocket Companies i.e., Rocket Companies and Global Star go up and down completely randomly.
Pair Corralation between Rocket Companies and Global Star
Considering the 90-day investment horizon Rocket Companies is expected to generate 1.45 times more return on investment than Global Star. However, Rocket Companies is 1.45 times more volatile than Global Star Acquisition. It trades about 0.24 of its potential returns per unit of risk. Global Star Acquisition is currently generating about 0.23 per unit of risk. If you would invest 1,126 in Rocket Companies on November 1, 2024 and sell it today you would earn a total of 158.00 from holding Rocket Companies or generate 14.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rocket Companies vs. Global Star Acquisition
Performance |
| Timeline |
| Rocket Companies |
| Global Star Acquisition |
Rocket Companies and Global Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rocket Companies and Global Star
The main advantage of trading using opposite Rocket Companies and Global Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rocket Companies position performs unexpectedly, Global Star 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 Global Star will offset losses from the drop in Global Star's long position.| Rocket Companies vs. Loandepot | Rocket Companies vs. Mr Cooper Group | Rocket Companies vs. PennyMac Finl Svcs | Rocket Companies vs. Guild Holdings Co |
| Global Star vs. Haemonetics | Global Star vs. Utah Medical Products | Global Star vs. HNI Corp | Global Star vs. Lincoln Electric Holdings |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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