Correlation Between Walker Dunlop and Berkshire Hills
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Berkshire Hills 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 Berkshire Hills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Berkshire Hills Bancorp, you can compare the effects of market volatilities on Walker Dunlop and Berkshire Hills 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 Berkshire Hills. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Berkshire Hills.
Diversification Opportunities for Walker Dunlop and Berkshire Hills
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Walker and Berkshire is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Berkshire Hills Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hills Bancorp 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 Berkshire Hills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berkshire Hills Bancorp has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Berkshire Hills go up and down completely randomly.
Pair Corralation between Walker Dunlop and Berkshire Hills
Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the Berkshire Hills. In addition to that, Walker Dunlop is 1.15 times more volatile than Berkshire Hills Bancorp. It trades about -0.26 of its total potential returns per unit of risk. Berkshire Hills Bancorp is currently generating about -0.24 per unit of volatility. If you would invest 2,628 in Berkshire Hills Bancorp on January 13, 2025 and sell it today you would lose (338.00) from holding Berkshire Hills Bancorp or give up 12.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. Berkshire Hills Bancorp
Performance |
| Timeline |
| Walker Dunlop |
| Berkshire Hills Bancorp |
Walker Dunlop and Berkshire Hills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Berkshire Hills
The main advantage of trading using opposite Walker Dunlop and Berkshire Hills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Berkshire Hills 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 Berkshire Hills will offset losses from the drop in Berkshire Hills' 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 |
| Berkshire Hills vs. Finward Bancorp | Berkshire Hills vs. Community West Bancshares | Berkshire Hills vs. First Community | Berkshire Hills vs. First Capital |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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