Correlation Between Walker Dunlop and BOX
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and BOX 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 BOX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and BOX, you can compare the effects of market volatilities on Walker Dunlop and BOX 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 BOX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and BOX.
Diversification Opportunities for Walker Dunlop and BOX
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Walker and BOX is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and BOX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOX 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 BOX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOX has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and BOX go up and down completely randomly.
Pair Corralation between Walker Dunlop and BOX
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 27.0 times less return on investment than BOX. But when comparing it to its historical volatility, Walker Dunlop is 14.06 times less risky than BOX. It trades about 0.04 of its potential returns per unit of risk. BOX is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 0.02 in BOX on August 27, 2024 and sell it today you would lose 0.00 from holding BOX or give up 5.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 27.22% |
| Values | Daily Returns |
Walker Dunlop vs. BOX
Performance |
| Timeline |
| Walker Dunlop |
| BOX |
Walker Dunlop and BOX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and BOX
The main advantage of trading using opposite Walker Dunlop and BOX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, BOX 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 BOX will offset losses from the drop in BOX'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 |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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