Correlation Between Walker Dunlop and American West
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and American West 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 American West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and American West Metals, you can compare the effects of market volatilities on Walker Dunlop and American West 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 American West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and American West.
Diversification Opportunities for Walker Dunlop and American West
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walker and American is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and American West Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American West Metals 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 American West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American West Metals has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and American West go up and down completely randomly.
Pair Corralation between Walker Dunlop and American West
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.34 times less return on investment than American West. But when comparing it to its historical volatility, Walker Dunlop is 3.3 times less risky than American West. It trades about 0.04 of its potential returns per unit of risk. American West Metals is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 13.00 in American West Metals on August 29, 2024 and sell it today you would lose (6.50) from holding American West Metals or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Walker Dunlop vs. American West Metals
Performance |
| Timeline |
| Walker Dunlop |
| American West Metals |
Walker Dunlop and American West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and American West
The main advantage of trading using opposite Walker Dunlop and American West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, American West 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 American West will offset losses from the drop in American West'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 |
| American West vs. Northern Star Resources | American West vs. Evolution Mining | American West vs. Bluescope Steel | American West vs. Sandfire Resources NL |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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