Correlation Between Walker Dunlop and American Beacon
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and American Beacon 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 American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and American Beacon Balanced, you can compare the effects of market volatilities on Walker Dunlop and American Beacon 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 American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and American Beacon.
Diversification Opportunities for Walker Dunlop and American Beacon
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walker and American is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and American Beacon Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Balanced 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 American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Balanced has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and American Beacon go up and down completely randomly.
Pair Corralation between Walker Dunlop and American Beacon
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.07 times less return on investment than American Beacon. In addition to that, Walker Dunlop is 2.94 times more volatile than American Beacon Balanced. It trades about 0.11 of its total potential returns per unit of risk. American Beacon Balanced is currently generating about 0.34 per unit of volatility. If you would invest 1,426 in American Beacon Balanced on September 4, 2024 and sell it today you would earn a total of 53.00 from holding American Beacon Balanced or generate 3.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. American Beacon Balanced
Performance |
| Timeline |
| Walker Dunlop |
| American Beacon Balanced |
Walker Dunlop and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and American Beacon
The main advantage of trading using opposite Walker Dunlop and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, American Beacon 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 American Beacon will offset losses from the drop in American Beacon'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 |
| American Beacon vs. American Beacon International | American Beacon vs. American Beacon Large | American Beacon vs. American Beacon Small | American Beacon vs. Dreyfus Opportunistic Midcap |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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