Correlation Between Walker Dunlop and Great China
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Great China 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 Great China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Great China Metal, you can compare the effects of market volatilities on Walker Dunlop and Great China 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 Great China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Great China.
Diversification Opportunities for Walker Dunlop and Great China
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Walker and Great is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Great China Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great China Metal 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 Great China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great China Metal has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Great China go up and down completely randomly.
Pair Corralation between Walker Dunlop and Great China
Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the Great China. In addition to that, Walker Dunlop is 4.95 times more volatile than Great China Metal. It trades about -0.13 of its total potential returns per unit of risk. Great China Metal is currently generating about 0.02 per unit of volatility. If you would invest 2,305 in Great China Metal on November 7, 2024 and sell it today you would earn a total of 10.00 from holding Great China Metal or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.92% |
| Values | Daily Returns |
Walker Dunlop vs. Great China Metal
Performance |
| Timeline |
| Walker Dunlop |
| Great China Metal |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Walker Dunlop and Great China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Great China
The main advantage of trading using opposite Walker Dunlop and Great China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Great China 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 Great China will offset losses from the drop in Great China'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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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