Correlation Between Mr Cooper and LOANDEPOT INC
Can any of the company-specific risk be diversified away by investing in both Mr Cooper and LOANDEPOT INC 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 Mr Cooper and LOANDEPOT INC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mr Cooper Group and LOANDEPOT INC A, you can compare the effects of market volatilities on Mr Cooper and LOANDEPOT INC 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 Mr Cooper with a short position of LOANDEPOT INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mr Cooper and LOANDEPOT INC.
Diversification Opportunities for Mr Cooper and LOANDEPOT INC
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between 07WA and LOANDEPOT is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Mr Cooper Group and LOANDEPOT INC A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOANDEPOT INC A and Mr Cooper 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 Mr Cooper Group are associated (or correlated) with LOANDEPOT INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOANDEPOT INC A has no effect on the direction of Mr Cooper i.e., Mr Cooper and LOANDEPOT INC go up and down completely randomly.
Pair Corralation between Mr Cooper and LOANDEPOT INC
Assuming the 90 days trading horizon Mr Cooper is expected to generate 2.23 times less return on investment than LOANDEPOT INC. But when comparing it to its historical volatility, Mr Cooper Group is 2.58 times less risky than LOANDEPOT INC. It trades about 0.08 of its potential returns per unit of risk. LOANDEPOT INC A is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 140.00 in LOANDEPOT INC A on September 24, 2024 and sell it today you would earn a total of 45.00 from holding LOANDEPOT INC A or generate 32.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Mr Cooper Group vs. LOANDEPOT INC A
Performance |
Timeline |
Mr Cooper Group |
LOANDEPOT INC A |
Mr Cooper and LOANDEPOT INC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mr Cooper and LOANDEPOT INC
The main advantage of trading using opposite Mr Cooper and LOANDEPOT INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mr Cooper position performs unexpectedly, LOANDEPOT INC 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 LOANDEPOT INC will offset losses from the drop in LOANDEPOT INC's long position.Mr Cooper vs. OSB GROUP PLC | Mr Cooper vs. FIRST NATIONAL FIN | Mr Cooper vs. Deutsche Pfandbriefbank AG | Mr Cooper vs. ELLINGTON FINL INC |
LOANDEPOT INC vs. Mr Cooper Group | LOANDEPOT INC vs. OSB GROUP PLC | LOANDEPOT INC vs. FIRST NATIONAL FIN | LOANDEPOT INC vs. Deutsche Pfandbriefbank AG |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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