Correlation Between Walker Dunlop and Lan Fa
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Lan Fa 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 Lan Fa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Lan Fa Textile, you can compare the effects of market volatilities on Walker Dunlop and Lan Fa 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 Lan Fa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Lan Fa.
Diversification Opportunities for Walker Dunlop and Lan Fa
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Walker and Lan is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Lan Fa Textile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lan Fa Textile 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 Lan Fa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lan Fa Textile has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Lan Fa go up and down completely randomly.
Pair Corralation between Walker Dunlop and Lan Fa
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.71 times more return on investment than Lan Fa. However, Walker Dunlop is 1.71 times more volatile than Lan Fa Textile. It trades about 0.0 of its potential returns per unit of risk. Lan Fa Textile is currently generating about -0.07 per unit of risk. If you would invest 11,127 in Walker Dunlop on August 30, 2024 and sell it today you would lose (45.00) from holding Walker Dunlop or give up 0.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. Lan Fa Textile
Performance |
| Timeline |
| Walker Dunlop |
| Lan Fa Textile |
Walker Dunlop and Lan Fa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Lan Fa
The main advantage of trading using opposite Walker Dunlop and Lan Fa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Lan Fa 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 Lan Fa will offset losses from the drop in Lan Fa's long position.| Walker Dunlop vs. Velocity Financial Llc | Walker Dunlop vs. Security National Financial | Walker Dunlop vs. Encore Capital Group | Walker Dunlop vs. PennyMac Finl Svcs |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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