Correlation Between Walker Dunlop and Gordon Auto
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Gordon Auto 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 Gordon Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Gordon Auto Body, you can compare the effects of market volatilities on Walker Dunlop and Gordon Auto 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 Gordon Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Gordon Auto.
Diversification Opportunities for Walker Dunlop and Gordon Auto
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walker and Gordon is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Gordon Auto Body in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gordon Auto Body 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 Gordon Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gordon Auto Body has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Gordon Auto go up and down completely randomly.
Pair Corralation between Walker Dunlop and Gordon Auto
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.19 times less return on investment than Gordon Auto. But when comparing it to its historical volatility, Walker Dunlop is 1.06 times less risky than Gordon Auto. It trades about 0.04 of its potential returns per unit of risk. Gordon Auto Body is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,500 in Gordon Auto Body on September 4, 2024 and sell it today you would earn a total of 1,335 from holding Gordon Auto Body or generate 53.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.97% |
| Values | Daily Returns |
Walker Dunlop vs. Gordon Auto Body
Performance |
| Timeline |
| Walker Dunlop |
| Gordon Auto Body |
Walker Dunlop and Gordon Auto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Gordon Auto
The main advantage of trading using opposite Walker Dunlop and Gordon Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Gordon Auto 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 Gordon Auto will offset losses from the drop in Gordon Auto'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 |
| Gordon Auto vs. Kaulin Mfg | Gordon Auto vs. Tex Ray Industrial Co | Gordon Auto vs. De Licacy Industrial | Gordon Auto vs. Kwong Fong Industries |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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