Correlation Between Walker Dunlop and BankUnited
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and BankUnited 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 BankUnited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and BankUnited, you can compare the effects of market volatilities on Walker Dunlop and BankUnited 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 BankUnited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and BankUnited.
Diversification Opportunities for Walker Dunlop and BankUnited
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Walker and BankUnited is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and BankUnited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankUnited 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 BankUnited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankUnited has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and BankUnited go up and down completely randomly.
Pair Corralation between Walker Dunlop and BankUnited
Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the BankUnited. But the stock apears to be less risky and, when comparing its historical volatility, Walker Dunlop is 2.79 times less risky than BankUnited. The stock trades about -0.09 of its potential returns per unit of risk. The BankUnited is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 3,459 in BankUnited on August 26, 2024 and sell it today you would earn a total of 813.00 from holding BankUnited or generate 23.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. BankUnited
Performance |
| Timeline |
| Walker Dunlop |
| BankUnited |
Walker Dunlop and BankUnited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and BankUnited
The main advantage of trading using opposite Walker Dunlop and BankUnited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, BankUnited 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 BankUnited will offset losses from the drop in BankUnited'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 |
| BankUnited vs. Fifth Third Bancorp | BankUnited vs. Zions Bancorporation | BankUnited vs. Huntington Bancshares Incorporated | BankUnited vs. PNC Financial Services |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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