Correlation Between Walker Dunlop and AMERICAN EXPRESS
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and AMERICAN EXPRESS 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 EXPRESS 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 EXPRESS CDR, you can compare the effects of market volatilities on Walker Dunlop and AMERICAN EXPRESS 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 EXPRESS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and AMERICAN EXPRESS.
Diversification Opportunities for Walker Dunlop and AMERICAN EXPRESS
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Walker and AMERICAN is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and AMERICAN EXPRESS CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMERICAN EXPRESS CDR 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 EXPRESS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMERICAN EXPRESS CDR has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and AMERICAN EXPRESS go up and down completely randomly.
Pair Corralation between Walker Dunlop and AMERICAN EXPRESS
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 2.47 times less return on investment than AMERICAN EXPRESS. In addition to that, Walker Dunlop is 1.01 times more volatile than AMERICAN EXPRESS CDR. It trades about 0.05 of its total potential returns per unit of risk. AMERICAN EXPRESS CDR is currently generating about 0.14 per unit of volatility. If you would invest 2,377 in AMERICAN EXPRESS CDR on August 27, 2024 and sell it today you would earn a total of 279.00 from holding AMERICAN EXPRESS CDR or generate 11.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 18.55% |
| Values | Daily Returns |
Walker Dunlop vs. AMERICAN EXPRESS CDR
Performance |
| Timeline |
| Walker Dunlop |
| AMERICAN EXPRESS CDR |
Walker Dunlop and AMERICAN EXPRESS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and AMERICAN EXPRESS
The main advantage of trading using opposite Walker Dunlop and AMERICAN EXPRESS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, AMERICAN EXPRESS 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 EXPRESS will offset losses from the drop in AMERICAN EXPRESS'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 EXPRESS vs. Canlan Ice Sports | AMERICAN EXPRESS vs. East Side Games | AMERICAN EXPRESS vs. Enthusiast Gaming Holdings | AMERICAN EXPRESS vs. Brookfield Office Properties |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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