Correlation Between Paragon Banking and Walker Dunlop
Can any of the company-specific risk be diversified away by investing in both Paragon Banking and Walker Dunlop 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 Paragon Banking and Walker Dunlop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Paragon Banking Group and Walker Dunlop, you can compare the effects of market volatilities on Paragon Banking and Walker Dunlop 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 Paragon Banking with a short position of Walker Dunlop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paragon Banking and Walker Dunlop.
Diversification Opportunities for Paragon Banking and Walker Dunlop
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Paragon and Walker is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Paragon Banking Group and Walker Dunlop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walker Dunlop and Paragon Banking 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 Paragon Banking Group are associated (or correlated) with Walker Dunlop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walker Dunlop has no effect on the direction of Paragon Banking i.e., Paragon Banking and Walker Dunlop go up and down completely randomly.
Pair Corralation between Paragon Banking and Walker Dunlop
Assuming the 90 days trading horizon Paragon Banking Group is expected to under-perform the Walker Dunlop. In addition to that, Paragon Banking is 1.04 times more volatile than Walker Dunlop. It trades about -0.07 of its total potential returns per unit of risk. Walker Dunlop is currently generating about -0.07 per unit of volatility. If you would invest 9,785 in Walker Dunlop on October 14, 2024 and sell it today you would lose (885.00) from holding Walker Dunlop or give up 9.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Paragon Banking Group vs. Walker Dunlop
Performance |
| Timeline |
| Paragon Banking Group |
| Walker Dunlop |
Paragon Banking and Walker Dunlop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paragon Banking and Walker Dunlop
The main advantage of trading using opposite Paragon Banking and Walker Dunlop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paragon Banking position performs unexpectedly, Walker Dunlop 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 Walker Dunlop will offset losses from the drop in Walker Dunlop's long position.| Paragon Banking vs. betterU Education Corp | Paragon Banking vs. Adtalem Global Education | Paragon Banking vs. AIR PRODCHEMICALS | Paragon Banking vs. Siamgas And Petrochemicals |
| Walker Dunlop vs. DIVERSIFIED ROYALTY | Walker Dunlop vs. Federal Home Loan | Walker Dunlop vs. Superior Plus Corp | Walker Dunlop vs. NMI Holdings |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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