Correlation Between Walker Dunlop and Basic Fit
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Basic Fit 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 Basic Fit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Basic Fit NV, you can compare the effects of market volatilities on Walker Dunlop and Basic Fit 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 Basic Fit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Basic Fit.
Diversification Opportunities for Walker Dunlop and Basic Fit
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walker and Basic is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Basic Fit NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Basic Fit NV 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 Basic Fit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Basic Fit NV has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Basic Fit go up and down completely randomly.
Pair Corralation between Walker Dunlop and Basic Fit
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.88 times more return on investment than Basic Fit. However, Walker Dunlop is 1.13 times less risky than Basic Fit. It trades about 0.08 of its potential returns per unit of risk. Basic Fit NV is currently generating about -0.01 per unit of risk. If you would invest 9,215 in Walker Dunlop on August 25, 2024 and sell it today you would earn a total of 1,634 from holding Walker Dunlop or generate 17.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.95% |
| Values | Daily Returns |
Walker Dunlop vs. Basic Fit NV
Performance |
| Timeline |
| Walker Dunlop |
| Basic Fit NV |
Walker Dunlop and Basic Fit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Basic Fit
The main advantage of trading using opposite Walker Dunlop and Basic Fit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Basic Fit 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 Basic Fit will offset losses from the drop in Basic Fit'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 |
| Basic Fit vs. Sligro Food Group | Basic Fit vs. Amsterdam Commodities NV | Basic Fit vs. Brunel International NV | Basic Fit vs. Van Lanschot NV |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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