Correlation Between Walker Dunlop and Bridge Builder
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Bridge Builder 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 Bridge Builder into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Bridge Builder Large, you can compare the effects of market volatilities on Walker Dunlop and Bridge Builder 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 Bridge Builder. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Bridge Builder.
Diversification Opportunities for Walker Dunlop and Bridge Builder
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walker and Bridge is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Bridge Builder Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridge Builder Large 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 Bridge Builder. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridge Builder Large has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Bridge Builder go up and down completely randomly.
Pair Corralation between Walker Dunlop and Bridge Builder
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 3.11 times less return on investment than Bridge Builder. In addition to that, Walker Dunlop is 2.37 times more volatile than Bridge Builder Large. It trades about 0.05 of its total potential returns per unit of risk. Bridge Builder Large is currently generating about 0.36 per unit of volatility. If you would invest 1,840 in Bridge Builder Large on September 1, 2024 and sell it today you would earn a total of 97.00 from holding Bridge Builder Large or generate 5.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Walker Dunlop vs. Bridge Builder Large
Performance |
| Timeline |
| Walker Dunlop |
| Bridge Builder Large |
Walker Dunlop and Bridge Builder Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Bridge Builder
The main advantage of trading using opposite Walker Dunlop and Bridge Builder positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Bridge Builder 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 Bridge Builder will offset losses from the drop in Bridge Builder'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 |
| Bridge Builder vs. Bridge Builder E | Bridge Builder vs. Bridge Builder Large | Bridge Builder vs. Bridge Builder Smallmid | Bridge Builder vs. Bridge Builder International |
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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