Correlation Between Guild Holdings and Mr Cooper

Can any of the company-specific risk be diversified away by investing in both Guild Holdings 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 Guild Holdings and Mr Cooper into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Guild Holdings Co and Mr Cooper Group, you can compare the effects of market volatilities on Guild Holdings 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 Guild Holdings with a short position of Mr Cooper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guild Holdings and Mr Cooper.

Diversification Opportunities for Guild Holdings and Mr Cooper

-0.77

Correlation Coefficient

Guild Holdings  Mr Cooper

Pay attention - limited upside

The 3 months correlation between Guild and COOP is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Guild Holdings Co 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 Guild Holdings 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 Guild Holdings Co 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 Guild Holdings i.e., Guild Holdings and Mr Cooper go up and down completely randomly.

Pair Corralation between Guild Holdings and Mr Cooper

Given the investment horizon of 90 days Guild Holdings Co is expected to under-perform the Mr Cooper. In addition to that, Guild Holdings is 1.46 times more volatile than Mr Cooper Group. It trades about -0.05 of its total potential returns per unit of risk. Mr Cooper Group is currently generating about 0.14 per unit of volatility. If you would invest  9,867  in Mr Cooper Group on November 28, 2024 and sell it today you would earn a total of  1,239  from holding Mr Cooper Group or generate 12.56% return on investment over 90 days.

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

Guild Holdings Co  vs.  Mr Cooper Group

Guild Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Guild Holdings Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's essential indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Mr Cooper Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mr Cooper Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Mr Cooper reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Guild Holdings and Mr Cooper

The main advantage of trading using opposite Guild Holdings and Mr Cooper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guild Holdings 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.

The idea behind Guild Holdings Co and Mr Cooper Group 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.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.