Correlation Between Walker Dunlop and Advanced Ceramic
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Advanced Ceramic 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 Advanced Ceramic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Advanced Ceramic X, you can compare the effects of market volatilities on Walker Dunlop and Advanced Ceramic 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 Advanced Ceramic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Advanced Ceramic.
Diversification Opportunities for Walker Dunlop and Advanced Ceramic
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walker and Advanced is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Advanced Ceramic X in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Ceramic X 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 Advanced Ceramic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Ceramic X has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Advanced Ceramic go up and down completely randomly.
Pair Corralation between Walker Dunlop and Advanced Ceramic
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.8 times more return on investment than Advanced Ceramic. However, Walker Dunlop is 1.26 times less risky than Advanced Ceramic. It trades about 0.06 of its potential returns per unit of risk. Advanced Ceramic X is currently generating about -0.04 per unit of risk. If you would invest 9,181 in Walker Dunlop on September 1, 2024 and sell it today you would earn a total of 1,837 from holding Walker Dunlop or generate 20.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.47% |
| Values | Daily Returns |
Walker Dunlop vs. Advanced Ceramic X
Performance |
| Timeline |
| Walker Dunlop |
| Advanced Ceramic X |
Walker Dunlop and Advanced Ceramic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Advanced Ceramic
The main advantage of trading using opposite Walker Dunlop and Advanced Ceramic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Advanced Ceramic 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 Advanced Ceramic will offset losses from the drop in Advanced Ceramic'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 |
| Advanced Ceramic vs. Central Reinsurance Corp | Advanced Ceramic vs. Grand Plastic Technology | Advanced Ceramic vs. CHINA DEVELOPMENT FINANCIAL | Advanced Ceramic vs. General Plastic Industrial |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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