Correlation Between Walker Dunlop and Lotte Non-Life
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Lotte Non-Life 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 Walker Dunlop and Lotte Non-Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Lotte Non Life, you can compare the effects of market volatilities on Walker Dunlop and Lotte Non-Life 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 Walker Dunlop with a short position of Lotte Non-Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Lotte Non-Life.
Diversification Opportunities for Walker Dunlop and Lotte Non-Life
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Walker and Lotte is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Lotte Non Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Non Life and Walker Dunlop 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 Walker Dunlop are associated (or correlated) with Lotte Non-Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Non Life has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Lotte Non-Life go up and down completely randomly.
Pair Corralation between Walker Dunlop and Lotte Non-Life
Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the Lotte Non-Life. But the stock apears to be less risky and, when comparing its historical volatility, Walker Dunlop is 1.2 times less risky than Lotte Non-Life. The stock trades about -0.42 of its potential returns per unit of risk. The Lotte Non Life is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 196,100 in Lotte Non Life on November 27, 2024 and sell it today you would lose (10,200) from holding Lotte Non Life or give up 5.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 85.0% |
| Values | Daily Returns |
Walker Dunlop vs. Lotte Non Life
Performance |
| Timeline |
| Walker Dunlop |
| Lotte Non Life |
Walker Dunlop and Lotte Non-Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Lotte Non-Life
The main advantage of trading using opposite Walker Dunlop and Lotte Non-Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Lotte Non-Life 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 Lotte Non-Life will offset losses from the drop in Lotte Non-Life's long position.| Walker Dunlop vs. Mr Cooper Group | Walker Dunlop vs. Velocity Financial Llc | Walker Dunlop vs. Security National Financial | Walker Dunlop vs. Encore Capital Group |
| Lotte Non-Life vs. DC Media Co | Lotte Non-Life vs. Nasmedia Co | Lotte Non-Life vs. ChipsMedia | Lotte Non-Life vs. JYP Entertainment 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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