Correlation Between LUMI GRUPPEN and Mr Cooper
Can any of the company-specific risk be diversified away by investing in both LUMI GRUPPEN and Mr Cooper 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 LUMI GRUPPEN and Mr Cooper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LUMI GRUPPEN AS and Mr Cooper Group, you can compare the effects of market volatilities on LUMI GRUPPEN and Mr Cooper 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 LUMI GRUPPEN with a short position of Mr Cooper. Check out your portfolio center. Please also check ongoing floating volatility patterns of LUMI GRUPPEN and Mr Cooper.
Diversification Opportunities for LUMI GRUPPEN and Mr Cooper
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LUMI and 07WA is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding LUMI GRUPPEN AS and Mr Cooper Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mr Cooper Group and LUMI GRUPPEN 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 LUMI GRUPPEN AS are associated (or correlated) with Mr Cooper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mr Cooper Group has no effect on the direction of LUMI GRUPPEN i.e., LUMI GRUPPEN and Mr Cooper go up and down completely randomly.
Pair Corralation between LUMI GRUPPEN and Mr Cooper
Assuming the 90 days horizon LUMI GRUPPEN AS is expected to generate 4.84 times more return on investment than Mr Cooper. However, LUMI GRUPPEN is 4.84 times more volatile than Mr Cooper Group. It trades about 0.14 of its potential returns per unit of risk. Mr Cooper Group is currently generating about -0.19 per unit of risk. If you would invest 85.00 in LUMI GRUPPEN AS on September 25, 2024 and sell it today you would earn a total of 13.00 from holding LUMI GRUPPEN AS or generate 15.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
LUMI GRUPPEN AS vs. Mr Cooper Group
Performance |
Timeline |
LUMI GRUPPEN AS |
Mr Cooper Group |
LUMI GRUPPEN and Mr Cooper Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LUMI GRUPPEN and Mr Cooper
The main advantage of trading using opposite LUMI GRUPPEN and Mr Cooper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LUMI GRUPPEN position performs unexpectedly, Mr Cooper 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 Mr Cooper will offset losses from the drop in Mr Cooper's long position.LUMI GRUPPEN vs. Carsales | LUMI GRUPPEN vs. Materialise NV | LUMI GRUPPEN vs. Motorcar Parts of | LUMI GRUPPEN vs. EAGLE MATERIALS |
Mr Cooper vs. DALATA HOTEL | Mr Cooper vs. GREENX METALS LTD | Mr Cooper vs. Host Hotels Resorts | Mr Cooper vs. Pebblebrook Hotel Trust |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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