Correlation Between Walker Dunlop and Bid
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Bid 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 Bid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Bid Corporation, you can compare the effects of market volatilities on Walker Dunlop and Bid 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 Bid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Bid.
Diversification Opportunities for Walker Dunlop and Bid
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walker and Bid is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Bid Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bid Corporation 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 Bid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bid Corporation has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Bid go up and down completely randomly.
Pair Corralation between Walker Dunlop and Bid
Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the Bid. In addition to that, Walker Dunlop is 1.72 times more volatile than Bid Corporation. It trades about -0.15 of its total potential returns per unit of risk. Bid Corporation is currently generating about 0.16 per unit of volatility. If you would invest 4,383,300 in Bid Corporation on November 23, 2024 and sell it today you would earn a total of 336,700 from holding Bid Corporation or generate 7.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.86% |
| Values | Daily Returns |
Walker Dunlop vs. Bid Corp.
Performance |
| Timeline |
| Walker Dunlop |
| Bid Corporation |
Walker Dunlop and Bid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Bid
The main advantage of trading using opposite Walker Dunlop and Bid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Bid 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 Bid will offset losses from the drop in Bid's long position.| Walker Dunlop vs. National Bank Holdings | ||
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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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