Correlation Between Walker Dunlop and Berkshire Hathaway
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Berkshire Hathaway 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 Hathaway 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 Hathaway, you can compare the effects of market volatilities on Walker Dunlop and Berkshire Hathaway 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 Hathaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Berkshire Hathaway.
Diversification Opportunities for Walker Dunlop and Berkshire Hathaway
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Walker and Berkshire is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Berkshire Hathaway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hathaway 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 Hathaway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berkshire Hathaway has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Berkshire Hathaway go up and down completely randomly.
Pair Corralation between Walker Dunlop and Berkshire Hathaway
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 25.29 times less return on investment than Berkshire Hathaway. But when comparing it to its historical volatility, Walker Dunlop is 26.69 times less risky than Berkshire Hathaway. It trades about 0.06 of its potential returns per unit of risk. Berkshire Hathaway is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 51,250,000 in Berkshire Hathaway on August 30, 2024 and sell it today you would earn a total of 17,300,000 from holding Berkshire Hathaway or generate 33.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.73% |
| Values | Daily Returns |
Walker Dunlop vs. Berkshire Hathaway
Performance |
| Timeline |
| Walker Dunlop |
| Berkshire Hathaway |
Walker Dunlop and Berkshire Hathaway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Berkshire Hathaway
The main advantage of trading using opposite Walker Dunlop and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Berkshire Hathaway 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 Hathaway will offset losses from the drop in Berkshire Hathaway'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 |
| Berkshire Hathaway vs. XLMedia PLC | Berkshire Hathaway vs. Nordic Semiconductor ASA | Berkshire Hathaway vs. REMEDY ENTERTAINMENT OYJ | Berkshire Hathaway vs. ZINC MEDIA GR |
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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