Correlation Between Walker Dunlop and Formosan Rubber
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Formosan Rubber 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 Formosan Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Formosan Rubber Group, you can compare the effects of market volatilities on Walker Dunlop and Formosan Rubber 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 Formosan Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Formosan Rubber.
Diversification Opportunities for Walker Dunlop and Formosan Rubber
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Walker and Formosan is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Formosan Rubber Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formosan Rubber Group 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 Formosan Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formosan Rubber Group has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Formosan Rubber go up and down completely randomly.
Pair Corralation between Walker Dunlop and Formosan Rubber
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 3.26 times more return on investment than Formosan Rubber. However, Walker Dunlop is 3.26 times more volatile than Formosan Rubber Group. It trades about 0.05 of its potential returns per unit of risk. Formosan Rubber Group is currently generating about 0.06 per unit of risk. If you would invest 9,462 in Walker Dunlop on November 5, 2024 and sell it today you would earn a total of 145.00 from holding Walker Dunlop or generate 1.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 73.68% |
| Values | Daily Returns |
Walker Dunlop vs. Formosan Rubber Group
Performance |
| Timeline |
| Walker Dunlop |
| Formosan Rubber Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Walker Dunlop and Formosan Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Formosan Rubber
The main advantage of trading using opposite Walker Dunlop and Formosan Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Formosan Rubber 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 Formosan Rubber will offset losses from the drop in Formosan Rubber'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 |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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