Correlation Between Walker Dunlop and Baker Steel
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Baker Steel 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 Baker Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Baker Steel Resources, you can compare the effects of market volatilities on Walker Dunlop and Baker Steel 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 Baker Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Baker Steel.
Diversification Opportunities for Walker Dunlop and Baker Steel
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Walker and Baker is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Baker Steel Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baker Steel Resources 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 Baker Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baker Steel Resources has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Baker Steel go up and down completely randomly.
Pair Corralation between Walker Dunlop and Baker Steel
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.06 times more return on investment than Baker Steel. However, Walker Dunlop is 1.06 times more volatile than Baker Steel Resources. It trades about 0.09 of its potential returns per unit of risk. Baker Steel Resources is currently generating about 0.02 per unit of risk. If you would invest 9,353 in Walker Dunlop on August 28, 2024 and sell it today you would earn a total of 1,896 from holding Walker Dunlop or generate 20.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Walker Dunlop vs. Baker Steel Resources
Performance |
| Timeline |
| Walker Dunlop |
| Baker Steel Resources |
Walker Dunlop and Baker Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Baker Steel
The main advantage of trading using opposite Walker Dunlop and Baker Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Baker Steel 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 Baker Steel will offset losses from the drop in Baker Steel'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 |
| Baker Steel vs. Spirent Communications plc | Baker Steel vs. Jacquet Metal Service | Baker Steel vs. Silvercorp Metals | Baker Steel vs. Fulcrum Metals PLC |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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