Correlation Between Loandepot and Walker Dunlop
Can any of the company-specific risk be diversified away by investing in both Loandepot 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 Loandepot and Walker Dunlop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loandepot and Walker Dunlop, you can compare the effects of market volatilities on Loandepot 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 Loandepot with a short position of Walker Dunlop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loandepot and Walker Dunlop.
Diversification Opportunities for Loandepot and Walker Dunlop
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Loandepot and Walker is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Loandepot and Walker Dunlop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walker Dunlop and Loandepot 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 Loandepot 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 Loandepot i.e., Loandepot and Walker Dunlop go up and down completely randomly.
Pair Corralation between Loandepot and Walker Dunlop
Considering the 90-day investment horizon Loandepot is expected to generate 3.37 times more return on investment than Walker Dunlop. However, Loandepot is 3.37 times more volatile than Walker Dunlop. It trades about 0.07 of its potential returns per unit of risk. Walker Dunlop is currently generating about 0.0 per unit of risk. If you would invest 217.00 in Loandepot on August 30, 2024 and sell it today you would earn a total of 13.00 from holding Loandepot or generate 5.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loandepot vs. Walker Dunlop
Performance |
| Timeline |
| Loandepot |
| Walker Dunlop |
Loandepot and Walker Dunlop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loandepot and Walker Dunlop
The main advantage of trading using opposite Loandepot and Walker Dunlop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loandepot 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.| Loandepot vs. CNFinance Holdings | Loandepot vs. Security National Financial | Loandepot vs. Encore Capital Group | Loandepot vs. UWM Holdings Corp |
| Walker Dunlop vs. Velocity Financial Llc | Walker Dunlop vs. Security National Financial | Walker Dunlop vs. Encore Capital Group | Walker Dunlop vs. PennyMac Finl Svcs |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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