Correlation Between Walker Dunlop and Business First
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Business First 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 Business First into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Business First Bancshares, you can compare the effects of market volatilities on Walker Dunlop and Business First 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 Business First. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Business First.
Diversification Opportunities for Walker Dunlop and Business First
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Walker and Business is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Business First Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Business First Bancshares 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 Business First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Business First Bancshares has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Business First go up and down completely randomly.
Pair Corralation between Walker Dunlop and Business First
Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the Business First. But the stock apears to be less risky and, when comparing its historical volatility, Walker Dunlop is 2.16 times less risky than Business First. The stock trades about 0.0 of its potential returns per unit of risk. The Business First Bancshares is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,700 in Business First Bancshares on August 31, 2024 and sell it today you would earn a total of 172.00 from holding Business First Bancshares or generate 6.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. Business First Bancshares
Performance |
| Timeline |
| Walker Dunlop |
| Business First Bancshares |
Walker Dunlop and Business First Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Business First
The main advantage of trading using opposite Walker Dunlop and Business First positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Business First 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 Business First will offset losses from the drop in Business First'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 |
| Business First vs. First Community | Business First vs. Community West Bancshares | Business First vs. First Financial Northwest | Business First vs. First Northwest Bancorp |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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