Correlation Between Mr Cooper and Security National

Can any of the company-specific risk be diversified away by investing in both Mr Cooper and Security National 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 Security National 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 Security National Financial, you can compare the effects of market volatilities on Mr Cooper and Security National 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 Security National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mr Cooper and Security National.

Diversification Opportunities for Mr Cooper and Security National

0.67

Correlation Coefficient

Mr Cooper  Security National

Poor diversification

The 3 months correlation between COOP and Security is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Mr Cooper Group and Security National Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Security National 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 Security National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Security National has no effect on the direction of Mr Cooper i.e., Mr Cooper and Security National go up and down completely randomly.

Pair Corralation between Mr Cooper and Security National

Given the investment horizon of 90 days Mr Cooper is expected to generate 4.51 times less return on investment than Security National. In addition to that, Mr Cooper is 1.4 times more volatile than Security National Financial. It trades about 0.06 of its total potential returns per unit of risk. Security National Financial is currently generating about 0.35 per unit of volatility. If you would invest  855.00  in Security National Financial on September 2, 2024 and sell it today you would earn a total of  453.00  from holding Security National Financial or generate 52.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Mr Cooper Group  vs.  Security National Financial

Mr Cooper Group

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mr Cooper Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Mr Cooper may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Security National

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Security National Financial are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental indicators, Security National sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mr Cooper and Security National

The main advantage of trading using opposite Mr Cooper and Security National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mr Cooper position performs unexpectedly, Security National 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 Security National will offset losses from the drop in Security National's long position.

The idea behind Mr Cooper Group and Security National Financial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.