Correlation Between Security National and Walker Dunlop
Can any of the company-specific risk be diversified away by investing in both Security National 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 Security National and Walker Dunlop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Security National Financial and Walker Dunlop, you can compare the effects of market volatilities on Security National 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 Security National with a short position of Walker Dunlop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Security National and Walker Dunlop.
Diversification Opportunities for Security National and Walker Dunlop
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Security and Walker is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Security National Financial and Walker Dunlop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walker Dunlop and Security National 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 Security National Financial 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 Security National i.e., Security National and Walker Dunlop go up and down completely randomly.
Pair Corralation between Security National and Walker Dunlop
Assuming the 90 days horizon Security National Financial is expected to generate 1.21 times more return on investment than Walker Dunlop. However, Security National is 1.21 times more volatile than Walker Dunlop. It trades about 0.17 of its potential returns per unit of risk. Walker Dunlop is currently generating about -0.08 per unit of risk. If you would invest 987.00 in Security National Financial on November 1, 2024 and sell it today you would earn a total of 240.00 from holding Security National Financial or generate 24.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Security National Financial vs. Walker Dunlop
Performance |
| Timeline |
| Security National |
| Walker Dunlop |
Security National and Walker Dunlop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Security National and Walker Dunlop
The main advantage of trading using opposite Security National and Walker Dunlop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Security National 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 Security National Financial 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. Guild Holdings Co | Walker Dunlop vs. Security National Financial | Walker Dunlop vs. Encore Capital Group |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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