Correlation Between Walker Dunlop and Brilliance China
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Brilliance China 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 Brilliance China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Brilliance China Automotive, you can compare the effects of market volatilities on Walker Dunlop and Brilliance China 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 Brilliance China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Brilliance China.
Diversification Opportunities for Walker Dunlop and Brilliance China
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Walker and Brilliance is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Brilliance China Automotive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brilliance China Aut 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 Brilliance China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brilliance China Aut has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Brilliance China go up and down completely randomly.
Pair Corralation between Walker Dunlop and Brilliance China
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 20.23 times less return on investment than Brilliance China. But when comparing it to its historical volatility, Walker Dunlop is 1.2 times less risky than Brilliance China. It trades about 0.04 of its potential returns per unit of risk. Brilliance China Automotive is currently generating about 0.71 of returns per unit of risk over similar time horizon. If you would invest 37.00 in Brilliance China Automotive on August 28, 2024 and sell it today you would earn a total of 1.00 from holding Brilliance China Automotive or generate 2.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 9.52% |
| Values | Daily Returns |
Walker Dunlop vs. Brilliance China Automotive
Performance |
| Timeline |
| Walker Dunlop |
| Brilliance China Aut |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Walker Dunlop and Brilliance China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Brilliance China
The main advantage of trading using opposite Walker Dunlop and Brilliance China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Brilliance China 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 Brilliance China will offset losses from the drop in Brilliance China'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 |
| Brilliance China vs. Village Super Market | Brilliance China vs. TFI International | Brilliance China vs. United Guardian | Brilliance China vs. BBB Foods |
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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