Correlation Between Rithm Capital and 456837AM5

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Can any of the company-specific risk be diversified away by investing in both Rithm Capital and 456837AM5 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 Rithm Capital and 456837AM5 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rithm Capital Corp and ING Groep NV, you can compare the effects of market volatilities on Rithm Capital and 456837AM5 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 Rithm Capital with a short position of 456837AM5. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rithm Capital and 456837AM5.

Diversification Opportunities for Rithm Capital and 456837AM5

Rithm456837AM5Diversified AwayRithm456837AM5Diversified Away100%
-0.67
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Rithm and 456837AM5 is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Rithm Capital Corp and ING Groep NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ING Groep NV and Rithm Capital 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 Rithm Capital Corp are associated (or correlated) with 456837AM5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ING Groep NV has no effect on the direction of Rithm Capital i.e., Rithm Capital and 456837AM5 go up and down completely randomly.

Pair Corralation between Rithm Capital and 456837AM5

Assuming the 90 days trading horizon Rithm Capital Corp is expected to generate 0.4 times more return on investment than 456837AM5. However, Rithm Capital Corp is 2.5 times less risky than 456837AM5. It trades about 0.16 of its potential returns per unit of risk. ING Groep NV is currently generating about -0.15 per unit of risk. If you would invest  2,410  in Rithm Capital Corp on October 21, 2024 and sell it today you would earn a total of  86.00  from holding Rithm Capital Corp or generate 3.57% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy83.87%
ValuesDaily Returns

Rithm Capital Corp  vs.  ING Groep NV

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -3-2-10123
JavaScript chart by amCharts 3.21.15RITM-PC 456837AM5
       Timeline  
Rithm Capital Corp 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Rithm Capital Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Rithm Capital is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan2424.224.424.624.825
ING Groep NV 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days ING Groep NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for ING Groep NV investors.
JavaScript chart by amCharts 3.21.153000312393949596979899100

Rithm Capital and 456837AM5 Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.03-0.73-0.43-0.130.01940.220.520.821.121.42 0.51.01.52.02.53.03.5
JavaScript chart by amCharts 3.21.15RITM-PC 456837AM5
       Returns  

Pair Trading with Rithm Capital and 456837AM5

The main advantage of trading using opposite Rithm Capital and 456837AM5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rithm Capital position performs unexpectedly, 456837AM5 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 456837AM5 will offset losses from the drop in 456837AM5's long position.
The idea behind Rithm Capital Corp and ING Groep NV 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

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