Correlation Between Mr Cooper and OCN Old

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

Diversification Opportunities for Mr Cooper and OCN Old

0.0

Correlation Coefficient

Mr Cooper  OCN Old

Pay attention - limited upside

The 3 months correlation between COOP and OCN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mr Cooper Group and OCN Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OCN Old 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 OCN Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OCN Old has no effect on the direction of Mr Cooper i.e., Mr Cooper and OCN Old go up and down completely randomly.

Pair Corralation between Mr Cooper and OCN Old

If you would invest  9,147  in Mr Cooper Group on December 27, 2024 and sell it today you would earn a total of  1,616  from holding Mr Cooper Group or generate 17.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Mr Cooper Group  vs.  OCN Old

Mr Cooper Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mr Cooper Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, Mr Cooper reported solid returns over the last few months and may actually be approaching a breakup point.

OCN Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days OCN Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, OCN Old is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Mr Cooper and OCN Old

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

The idea behind Mr Cooper Group and OCN Old 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.