Correlation Between Walker Dunlop and Hercules Capital
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Hercules Capital 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 Walker Dunlop and Hercules Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Hercules Capital, you can compare the effects of market volatilities on Walker Dunlop and Hercules Capital 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 Walker Dunlop with a short position of Hercules Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Hercules Capital.
Diversification Opportunities for Walker Dunlop and Hercules Capital
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Walker and Hercules is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Hercules Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hercules Capital and Walker Dunlop 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 Walker Dunlop are associated (or correlated) with Hercules Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hercules Capital has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Hercules Capital go up and down completely randomly.
Pair Corralation between Walker Dunlop and Hercules Capital
Assuming the 90 days horizon Walker Dunlop is expected to under-perform the Hercules Capital. In addition to that, Walker Dunlop is 1.15 times more volatile than Hercules Capital. It trades about -0.4 of its total potential returns per unit of risk. Hercules Capital is currently generating about 0.12 per unit of volatility. If you would invest 1,854 in Hercules Capital on October 13, 2024 and sell it today you would earn a total of 66.00 from holding Hercules Capital or generate 3.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Walker Dunlop vs. Hercules Capital
Performance |
| Timeline |
| Walker Dunlop |
| Hercules Capital |
Walker Dunlop and Hercules Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Hercules Capital
The main advantage of trading using opposite Walker Dunlop and Hercules Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Hercules Capital 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 Hercules Capital will offset losses from the drop in Hercules Capital's long position.| Walker Dunlop vs. STRAYER EDUCATION | Walker Dunlop vs. Strategic Education | Walker Dunlop vs. Minerals Technologies | Walker Dunlop vs. CHINA EDUCATION GROUP |
| Hercules Capital vs. SALESFORCE INC CDR | Hercules Capital vs. ASURE SOFTWARE | Hercules Capital vs. Take Two Interactive Software | Hercules Capital vs. AXWAY SOFTWARE EO |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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