Correlation Between Walker Dunlop and Assured Guaranty
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Assured Guaranty 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 Assured Guaranty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Assured Guaranty, you can compare the effects of market volatilities on Walker Dunlop and Assured Guaranty 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 Assured Guaranty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Assured Guaranty.
Diversification Opportunities for Walker Dunlop and Assured Guaranty
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Walker and Assured is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Assured Guaranty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assured Guaranty 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 Assured Guaranty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assured Guaranty has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Assured Guaranty go up and down completely randomly.
Pair Corralation between Walker Dunlop and Assured Guaranty
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.26 times less return on investment than Assured Guaranty. In addition to that, Walker Dunlop is 1.38 times more volatile than Assured Guaranty. It trades about 0.06 of its total potential returns per unit of risk. Assured Guaranty is currently generating about 0.11 per unit of volatility. If you would invest 5,399 in Assured Guaranty on August 28, 2024 and sell it today you would earn a total of 4,070 from holding Assured Guaranty or generate 75.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. Assured Guaranty
Performance |
| Timeline |
| Walker Dunlop |
| Assured Guaranty |
Walker Dunlop and Assured Guaranty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Assured Guaranty
The main advantage of trading using opposite Walker Dunlop and Assured Guaranty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Assured Guaranty 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 Assured Guaranty will offset losses from the drop in Assured Guaranty'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 |
| Assured Guaranty vs. AXIS Capital Holdings | Assured Guaranty vs. MBIA Inc | Assured Guaranty vs. Assurant | Assured Guaranty vs. American Financial 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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