Correlation Between Walker Dunlop and Ameren Illinois
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Ameren Illinois 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 Ameren Illinois into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Ameren Illinois, you can compare the effects of market volatilities on Walker Dunlop and Ameren Illinois 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 Ameren Illinois. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Ameren Illinois.
Diversification Opportunities for Walker Dunlop and Ameren Illinois
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Walker and Ameren is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Ameren Illinois in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameren Illinois 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 Ameren Illinois. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameren Illinois has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Ameren Illinois go up and down completely randomly.
Pair Corralation between Walker Dunlop and Ameren Illinois
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.38 times more return on investment than Ameren Illinois. However, Walker Dunlop is 1.38 times more volatile than Ameren Illinois. It trades about 0.05 of its potential returns per unit of risk. Ameren Illinois is currently generating about -0.06 per unit of risk. If you would invest 10,870 in Walker Dunlop on September 1, 2024 and sell it today you would earn a total of 148.00 from holding Walker Dunlop or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. Ameren Illinois
Performance |
| Timeline |
| Walker Dunlop |
| Ameren Illinois |
Walker Dunlop and Ameren Illinois Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Ameren Illinois
The main advantage of trading using opposite Walker Dunlop and Ameren Illinois positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Ameren Illinois 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 Ameren Illinois will offset losses from the drop in Ameren Illinois' 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 |
| Ameren Illinois vs. Nok Airlines Public | Ameren Illinois vs. Assurant | Ameren Illinois vs. Volaris | Ameren Illinois vs. Direct Line Insurance |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |