Correlation Between Walker Dunlop and Dongkuk Steel
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Dongkuk Steel 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 Dongkuk Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Dongkuk Steel Mill, you can compare the effects of market volatilities on Walker Dunlop and Dongkuk Steel 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 Dongkuk Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Dongkuk Steel.
Diversification Opportunities for Walker Dunlop and Dongkuk Steel
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Walker and Dongkuk is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Dongkuk Steel Mill in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongkuk Steel Mill 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 Dongkuk Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongkuk Steel Mill has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Dongkuk Steel go up and down completely randomly.
Pair Corralation between Walker Dunlop and Dongkuk Steel
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 8.19 times less return on investment than Dongkuk Steel. But when comparing it to its historical volatility, Walker Dunlop is 16.22 times less risky than Dongkuk Steel. It trades about 0.08 of its potential returns per unit of risk. Dongkuk Steel Mill is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 934,578 in Dongkuk Steel Mill on August 29, 2024 and sell it today you would lose (185,578) from holding Dongkuk Steel Mill or give up 19.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.95% |
| Values | Daily Returns |
Walker Dunlop vs. Dongkuk Steel Mill
Performance |
| Timeline |
| Walker Dunlop |
| Dongkuk Steel Mill |
Walker Dunlop and Dongkuk Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Dongkuk Steel
The main advantage of trading using opposite Walker Dunlop and Dongkuk Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Dongkuk Steel 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 Dongkuk Steel will offset losses from the drop in Dongkuk Steel'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 |
| Dongkuk Steel vs. iNtRON Biotechnology | Dongkuk Steel vs. Korean Drug Co | Dongkuk Steel vs. Vitzro Tech Co | Dongkuk Steel vs. CU Tech 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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