Correlation Between Walker Dunlop and APA
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and APA 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 APA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and APA Group, you can compare the effects of market volatilities on Walker Dunlop and APA 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 APA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and APA.
Diversification Opportunities for Walker Dunlop and APA
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Walker and APA is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and APA Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APA Group 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 APA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APA Group has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and APA go up and down completely randomly.
Pair Corralation between Walker Dunlop and APA
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.45 times more return on investment than APA. However, Walker Dunlop is 2.22 times less risky than APA. It trades about 0.09 of its potential returns per unit of risk. APA Group is currently generating about -0.03 per unit of risk. If you would invest 9,353 in Walker Dunlop on August 28, 2024 and sell it today you would earn a total of 1,896 from holding Walker Dunlop or generate 20.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Walker Dunlop vs. APA Group
Performance |
| Timeline |
| Walker Dunlop |
| APA Group |
Walker Dunlop and APA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and APA
The main advantage of trading using opposite Walker Dunlop and APA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, APA 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 APA will offset losses from the drop in APA'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 |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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