Correlation Between Ocwen Financial and Guild Holdings

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

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

Diversification Opportunities for Ocwen Financial and Guild Holdings

-0.74

Correlation Coefficient

Ocwen Financial  Guild Holdings

Pay attention - limited upside

The 3 months correlation between Ocwen and Guild is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Ocwen Financial and Guild Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guild Holdings and Ocwen Financial 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 Ocwen Financial are associated (or correlated) with Guild Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guild Holdings has no effect on the direction of Ocwen Financial i.e., Ocwen Financial and Guild Holdings go up and down completely randomly.

Pair Corralation between Ocwen Financial and Guild Holdings

If you would invest  3,494  in Ocwen Financial on August 31, 2024 and sell it today you would earn a total of  0.00  from holding Ocwen Financial or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Ocwen Financial  vs.  Guild Holdings Co

Ocwen Financial

Risk-Adjusted Performance

0 of 100

Very Weak

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

Guild Holdings

Risk-Adjusted Performance

0 of 100

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 fragile performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Ocwen Financial and Guild Holdings

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

The idea behind Ocwen Financial and Guild Holdings Co 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..