Correlation Between Walker Dunlop and Bayer AG
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Bayer AG 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 Bayer AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Bayer AG, you can compare the effects of market volatilities on Walker Dunlop and Bayer AG 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 Bayer AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Bayer AG.
Diversification Opportunities for Walker Dunlop and Bayer AG
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Walker and Bayer is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Bayer AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayer AG 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 Bayer AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayer AG has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Bayer AG go up and down completely randomly.
Pair Corralation between Walker Dunlop and Bayer AG
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.47 times more return on investment than Bayer AG. However, Walker Dunlop is 2.14 times less risky than Bayer AG. It trades about 0.04 of its potential returns per unit of risk. Bayer AG is currently generating about -0.4 per unit of risk. If you would invest 11,120 in Walker Dunlop on August 28, 2024 and sell it today you would earn a total of 129.00 from holding Walker Dunlop or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. Bayer AG
Performance |
| Timeline |
| Walker Dunlop |
| Bayer AG |
Walker Dunlop and Bayer AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Bayer AG
The main advantage of trading using opposite Walker Dunlop and Bayer AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Bayer AG 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 Bayer AG will offset losses from the drop in Bayer AG'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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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