Correlation Between Rocket Companies and SNET
Can any of the company-specific risk be diversified away by investing in both Rocket Companies and SNET 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 SNET into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rocket Companies and SNET, you can compare the effects of market volatilities on Rocket Companies and SNET 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 SNET. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rocket Companies and SNET.
Diversification Opportunities for Rocket Companies and SNET
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Rocket and SNET is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Rocket Companies and SNET in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNET 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 SNET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNET has no effect on the direction of Rocket Companies i.e., Rocket Companies and SNET go up and down completely randomly.
Pair Corralation between Rocket Companies and SNET
Considering the 90-day investment horizon Rocket Companies is expected to under-perform the SNET. But the stock apears to be less risky and, when comparing its historical volatility, Rocket Companies is 4.97 times less risky than SNET. The stock trades about -0.02 of its potential returns per unit of risk. The SNET is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 0.05 in SNET on December 2, 2025 and sell it today you would earn a total of 0.11 from holding SNET or generate 220.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.31% |
| Values | Daily Returns |
Rocket Companies vs. SNET
Performance |
| Timeline |
| Rocket Companies |
| SNET |
Rocket Companies and SNET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rocket Companies and SNET
The main advantage of trading using opposite Rocket Companies and SNET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rocket Companies position performs unexpectedly, SNET 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 SNET will offset losses from the drop in SNET's long position.| Rocket Companies vs. Nasdaq Inc | Rocket Companies vs. MSCI Inc | Rocket Companies vs. MetLife | Rocket Companies vs. The Allstate |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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