Correlation Between Walker Dunlop and ArcelorMittal
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and ArcelorMittal 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 ArcelorMittal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and ArcelorMittal SA, you can compare the effects of market volatilities on Walker Dunlop and ArcelorMittal 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 ArcelorMittal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and ArcelorMittal.
Diversification Opportunities for Walker Dunlop and ArcelorMittal
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Walker and ArcelorMittal is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and ArcelorMittal SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ArcelorMittal SA 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 ArcelorMittal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ArcelorMittal SA has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and ArcelorMittal go up and down completely randomly.
Pair Corralation between Walker Dunlop and ArcelorMittal
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 13.95 times less return on investment than ArcelorMittal. But when comparing it to its historical volatility, Walker Dunlop is 2.23 times less risky than ArcelorMittal. It trades about 0.04 of its potential returns per unit of risk. ArcelorMittal SA is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 2,260 in ArcelorMittal SA on August 28, 2024 and sell it today you would earn a total of 250.00 from holding ArcelorMittal SA or generate 11.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 57.14% |
| Values | Daily Returns |
Walker Dunlop vs. ArcelorMittal SA
Performance |
| Timeline |
| Walker Dunlop |
| ArcelorMittal SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Walker Dunlop and ArcelorMittal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and ArcelorMittal
The main advantage of trading using opposite Walker Dunlop and ArcelorMittal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, ArcelorMittal 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 ArcelorMittal will offset losses from the drop in ArcelorMittal'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 |
| ArcelorMittal vs. Olympic Steel | ArcelorMittal vs. Mesabi Trust | ArcelorMittal vs. Universal Stainless Alloy | ArcelorMittal vs. POSCO Holdings |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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