Correlation Between Rocket Companies and Security National

Can any of the company-specific risk be diversified away by investing in both Rocket Companies 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 Rocket Companies and Security National into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Rocket Companies and Security National

0.41

Correlation Coefficient

Rocket Companies  Security National

Very weak diversification

The 3 months correlation between Rocket and Security is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Rocket Companies and Security National Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Security National and Rocket Companies 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 Rocket Companies 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 Rocket Companies i.e., Rocket Companies and Security National go up and down completely randomly.

Pair Corralation between Rocket Companies and Security National

Considering the 90-day investment horizon Rocket Companies is expected to generate 2.28 times more return on investment than Security National. However, Rocket Companies is 2.28 times more volatile than Security National Financial. It trades about 0.11 of its potential returns per unit of risk. Security National Financial is currently generating about 0.05 per unit of risk. If you would invest  1,044  in Rocket Companies on December 29, 2024 and sell it today you would earn a total of  259.00  from holding Rocket Companies or generate 24.81% return on investment over 90 days.

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

Rocket Companies  vs.  Security National Financial

Rocket Companies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rocket Companies are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent forward-looking signals, Rocket Companies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Security National

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Security National Financial are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, Security National is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Rocket Companies and Security National

The main advantage of trading using opposite Rocket Companies and Security National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rocket Companies 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 Rocket Companies 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.

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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.