Correlation Between Astar and Walker Dunlop
Can any of the company-specific risk be diversified away by investing in both Astar 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 Astar and Walker Dunlop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and Walker Dunlop, you can compare the effects of market volatilities on Astar 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 Astar with a short position of Walker Dunlop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and Walker Dunlop.
Diversification Opportunities for Astar and Walker Dunlop
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Astar and Walker is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Walker Dunlop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walker Dunlop and Astar 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 Astar 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 Astar i.e., Astar and Walker Dunlop go up and down completely randomly.
Pair Corralation between Astar and Walker Dunlop
Assuming the 90 days trading horizon Astar is expected to generate 2.75 times more return on investment than Walker Dunlop. However, Astar is 2.75 times more volatile than Walker Dunlop. It trades about -0.13 of its potential returns per unit of risk. Walker Dunlop is currently generating about -0.4 per unit of risk. If you would invest 7.35 in Astar on October 14, 2024 and sell it today you would lose (1.21) from holding Astar or give up 16.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 80.95% |
| Values | Daily Returns |
Astar vs. Walker Dunlop
Performance |
| Timeline |
| Astar |
| Walker Dunlop |
Astar and Walker Dunlop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and Walker Dunlop
The main advantage of trading using opposite Astar and Walker Dunlop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar 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.The idea behind Astar and Walker Dunlop 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.| 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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