Correlation Between Walker Dunlop and AIB Group
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and AIB Group 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 AIB Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and AIB Group PLC, you can compare the effects of market volatilities on Walker Dunlop and AIB Group 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 AIB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and AIB Group.
Diversification Opportunities for Walker Dunlop and AIB Group
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walker and AIB is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and AIB Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIB Group PLC 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 AIB Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIB Group PLC has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and AIB Group go up and down completely randomly.
Pair Corralation between Walker Dunlop and AIB Group
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 4.89 times less return on investment than AIB Group. But when comparing it to its historical volatility, Walker Dunlop is 1.41 times less risky than AIB Group. It trades about 0.04 of its potential returns per unit of risk. AIB Group PLC is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 488.00 in AIB Group PLC on August 28, 2024 and sell it today you would earn a total of 32.00 from holding AIB Group PLC or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. AIB Group PLC
Performance |
| Timeline |
| Walker Dunlop |
| AIB Group PLC |
Walker Dunlop and AIB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and AIB Group
The main advantage of trading using opposite Walker Dunlop and AIB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, AIB Group 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 AIB Group will offset losses from the drop in AIB Group'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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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