Correlation Between Timbercreek Financial and Walker Dunlop
Can any of the company-specific risk be diversified away by investing in both Timbercreek Financial 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 Timbercreek Financial and Walker Dunlop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Timbercreek Financial Corp and Walker Dunlop, you can compare the effects of market volatilities on Timbercreek Financial 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 Timbercreek Financial with a short position of Walker Dunlop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Timbercreek Financial and Walker Dunlop.
Diversification Opportunities for Timbercreek Financial and Walker Dunlop
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Timbercreek and Walker is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Timbercreek Financial Corp and Walker Dunlop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walker Dunlop and Timbercreek Financial 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 Timbercreek Financial Corp 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 Timbercreek Financial i.e., Timbercreek Financial and Walker Dunlop go up and down completely randomly.
Pair Corralation between Timbercreek Financial and Walker Dunlop
Assuming the 90 days horizon Timbercreek Financial Corp is expected to generate 1.15 times more return on investment than Walker Dunlop. However, Timbercreek Financial is 1.15 times more volatile than Walker Dunlop. It trades about 0.12 of its potential returns per unit of risk. Walker Dunlop is currently generating about 0.08 per unit of risk. If you would invest 517.00 in Timbercreek Financial Corp on September 5, 2024 and sell it today you would earn a total of 23.00 from holding Timbercreek Financial Corp or generate 4.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Timbercreek Financial Corp vs. Walker Dunlop
Performance |
| Timeline |
| Timbercreek Financial |
| Walker Dunlop |
Timbercreek Financial and Walker Dunlop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Timbercreek Financial and Walker Dunlop
The main advantage of trading using opposite Timbercreek Financial and Walker Dunlop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Timbercreek Financial 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.| Timbercreek Financial vs. PennyMac Finl Svcs | Timbercreek Financial vs. Encore Capital Group | Timbercreek Financial vs. Rocket Companies | Timbercreek Financial vs. Loandepot |
| Walker Dunlop vs. Mr Cooper Group | Walker Dunlop vs. Security National Financial | Walker Dunlop vs. Encore Capital Group | Walker Dunlop vs. Timbercreek Financial Corp |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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