Correlation Between UWM Holdings and OCN Old

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

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

Diversification Opportunities for UWM Holdings and OCN Old

0.0

Correlation Coefficient

UWM Holdings  OCN Old

Pay attention - limited upside

The 3 months correlation between UWM and OCN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding UWM Holdings Corp and OCN Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OCN Old and UWM 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 UWM Holdings Corp 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 UWM Holdings i.e., UWM Holdings and OCN Old go up and down completely randomly.

Pair Corralation between UWM Holdings and OCN Old

If you would invest  574.00  in UWM Holdings Corp on December 26, 2024 and sell it today you would lose (7.00) from holding UWM Holdings Corp or give up 1.22% of portfolio value over 90 days.

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

UWM Holdings Corp  vs.  OCN Old

UWM Holdings Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days UWM Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, UWM Holdings is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

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 UWM Holdings and OCN Old

The main advantage of trading using opposite UWM Holdings and OCN Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UWM Holdings 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 UWM Holdings Corp 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.