Correlation Between CNFinance Holdings and Walker Dunlop
Can any of the company-specific risk be diversified away by investing in both CNFinance Holdings 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 CNFinance Holdings and Walker Dunlop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNFinance Holdings and Walker Dunlop, you can compare the effects of market volatilities on CNFinance Holdings 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 CNFinance Holdings with a short position of Walker Dunlop. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNFinance Holdings and Walker Dunlop.
Diversification Opportunities for CNFinance Holdings and Walker Dunlop
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CNFinance and Walker is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding CNFinance Holdings and Walker Dunlop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walker Dunlop and CNFinance 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 CNFinance Holdings 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 CNFinance Holdings i.e., CNFinance Holdings and Walker Dunlop go up and down completely randomly.
Pair Corralation between CNFinance Holdings and Walker Dunlop
Considering the 90-day investment horizon CNFinance Holdings is expected to under-perform the Walker Dunlop. In addition to that, CNFinance Holdings is 2.33 times more volatile than Walker Dunlop. It trades about -0.01 of its total potential returns per unit of risk. Walker Dunlop is currently generating about 0.04 per unit of volatility. If you would invest 8,063 in Walker Dunlop on August 24, 2024 and sell it today you would earn a total of 2,786 from holding Walker Dunlop or generate 34.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNFinance Holdings vs. Walker Dunlop
Performance |
| Timeline |
| CNFinance Holdings |
| Walker Dunlop |
CNFinance Holdings and Walker Dunlop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNFinance Holdings and Walker Dunlop
The main advantage of trading using opposite CNFinance Holdings and Walker Dunlop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNFinance Holdings 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.| CNFinance Holdings vs. Guild Holdings Co | CNFinance Holdings vs. PennyMac Finl Svcs | CNFinance Holdings vs. Security National Financial | CNFinance Holdings vs. Encore Capital Group |
| Walker Dunlop vs. Encore Capital Group | Walker Dunlop vs. Federal Home Loan | Walker Dunlop vs. CNFinance Holdings | Walker Dunlop vs. Greystone Housing Impact |
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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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