Correlation Between Walker Dunlop and LG Energy
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and LG Energy 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 LG Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and LG Energy Solution, you can compare the effects of market volatilities on Walker Dunlop and LG Energy 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 LG Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and LG Energy.
Diversification Opportunities for Walker Dunlop and LG Energy
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Walker and 373220 is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and LG Energy Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Energy Solution 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 LG Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Energy Solution has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and LG Energy go up and down completely randomly.
Pair Corralation between Walker Dunlop and LG Energy
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.39 times more return on investment than LG Energy. However, Walker Dunlop is 2.58 times less risky than LG Energy. It trades about 0.05 of its potential returns per unit of risk. LG Energy Solution is currently generating about -0.05 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 | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Walker Dunlop vs. LG Energy Solution
Performance |
| Timeline |
| Walker Dunlop |
| LG Energy Solution |
Walker Dunlop and LG Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and LG Energy
The main advantage of trading using opposite Walker Dunlop and LG Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, LG Energy 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 LG Energy will offset losses from the drop in LG Energy'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 |
| LG Energy vs. Doosan Heavy Ind | LG Energy vs. Hyosung Heavy Industries | LG Energy vs. Aprogen KIC | LG Energy vs. SNTEnergy Co |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |