Correlation Between Walker Dunlop and LPKF Laser
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and LPKF Laser 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 LPKF Laser into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and LPKF Laser Electronics, you can compare the effects of market volatilities on Walker Dunlop and LPKF Laser 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 LPKF Laser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and LPKF Laser.
Diversification Opportunities for Walker Dunlop and LPKF Laser
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Walker and LPKF is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and LPKF Laser Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LPKF Laser Electronics 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 LPKF Laser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LPKF Laser Electronics has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and LPKF Laser go up and down completely randomly.
Pair Corralation between Walker Dunlop and LPKF Laser
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 2.29 times more return on investment than LPKF Laser. However, Walker Dunlop is 2.29 times more volatile than LPKF Laser Electronics. It trades about 0.05 of its potential returns per unit of risk. LPKF Laser Electronics is currently generating about -0.15 per unit of risk. If you would invest 10,870 in Walker Dunlop on September 1, 2024 and sell it today you would earn a total of 148.00 from holding Walker Dunlop or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Walker Dunlop vs. LPKF Laser Electronics
Performance |
| Timeline |
| Walker Dunlop |
| LPKF Laser Electronics |
Walker Dunlop and LPKF Laser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and LPKF Laser
The main advantage of trading using opposite Walker Dunlop and LPKF Laser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, LPKF Laser 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 LPKF Laser will offset losses from the drop in LPKF Laser'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 |
| LPKF Laser vs. Coor Service Management | LPKF Laser vs. Empire Metals Limited | LPKF Laser vs. Adriatic Metals | LPKF Laser vs. Golden Metal Resources |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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