Correlation Between Walker Dunlop and Aspen Insurance
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Aspen Insurance 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 Aspen Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Aspen Insurance Holdings, you can compare the effects of market volatilities on Walker Dunlop and Aspen Insurance 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 Aspen Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Aspen Insurance.
Diversification Opportunities for Walker Dunlop and Aspen Insurance
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walker and Aspen is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Aspen Insurance Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aspen Insurance Holdings 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 Aspen Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aspen Insurance Holdings has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Aspen Insurance go up and down completely randomly.
Pair Corralation between Walker Dunlop and Aspen Insurance
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 2.47 times more return on investment than Aspen Insurance. However, Walker Dunlop is 2.47 times more volatile than Aspen Insurance Holdings. It trades about 0.04 of its potential returns per unit of risk. Aspen Insurance Holdings is currently generating about -0.22 per unit of risk. If you would invest 11,120 in Walker Dunlop on August 28, 2024 and sell it today you would earn a total of 129.00 from holding Walker Dunlop or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Walker Dunlop vs. Aspen Insurance Holdings
Performance |
| Timeline |
| Walker Dunlop |
| Aspen Insurance Holdings |
Walker Dunlop and Aspen Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Aspen Insurance
The main advantage of trading using opposite Walker Dunlop and Aspen Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Aspen Insurance 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 Aspen Insurance will offset losses from the drop in Aspen Insurance'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 |
| Aspen Insurance vs. The Allstate | Aspen Insurance vs. Aspen Insurance Holdings | Aspen Insurance vs. AmTrust Financial Services | Aspen Insurance vs. Argo Group International |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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