Correlation Between Walker Dunlop and Humana
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Humana 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 Humana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Humana Inc, you can compare the effects of market volatilities on Walker Dunlop and Humana 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 Humana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Humana.
Diversification Opportunities for Walker Dunlop and Humana
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Walker and Humana is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Humana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humana Inc 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 Humana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humana Inc has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Humana go up and down completely randomly.
Pair Corralation between Walker Dunlop and Humana
Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the Humana. But the stock apears to be less risky and, when comparing its historical volatility, Walker Dunlop is 2.24 times less risky than Humana. The stock trades about -0.09 of its potential returns per unit of risk. The Humana Inc is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 26,063 in Humana Inc on August 26, 2024 and sell it today you would earn a total of 3,414 from holding Humana Inc or generate 13.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. Humana Inc
Performance |
| Timeline |
| Walker Dunlop |
| Humana Inc |
Walker Dunlop and Humana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Humana
The main advantage of trading using opposite Walker Dunlop and Humana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Humana 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 Humana will offset losses from the drop in Humana'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 |
| Humana vs. CAP LEASE AVIATION | Humana vs. Cairn Homes PLC | Humana vs. Martin Marietta Materials | Humana vs. Ecclesiastical Insurance Office |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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