Correlation Between Walker Dunlop and Coastal Carolina
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Coastal Carolina 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 Coastal Carolina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Coastal Carolina Bancshares, you can compare the effects of market volatilities on Walker Dunlop and Coastal Carolina 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 Coastal Carolina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Coastal Carolina.
Diversification Opportunities for Walker Dunlop and Coastal Carolina
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Walker and Coastal is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Coastal Carolina Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coastal Carolina Ban 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 Coastal Carolina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coastal Carolina Ban has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Coastal Carolina go up and down completely randomly.
Pair Corralation between Walker Dunlop and Coastal Carolina
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.73 times more return on investment than Coastal Carolina. However, Walker Dunlop is 1.73 times more volatile than Coastal Carolina Bancshares. It trades about 0.08 of its potential returns per unit of risk. Coastal Carolina Bancshares is currently generating about 0.12 per unit of risk. If you would invest 9,481 in Walker Dunlop on August 29, 2024 and sell it today you would earn a total of 1,601 from holding Walker Dunlop or generate 16.89% 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. Coastal Carolina Bancshares
Performance |
| Timeline |
| Walker Dunlop |
| Coastal Carolina Ban |
Walker Dunlop and Coastal Carolina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Coastal Carolina
The main advantage of trading using opposite Walker Dunlop and Coastal Carolina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Coastal Carolina 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 Coastal Carolina will offset losses from the drop in Coastal Carolina'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 |
| Coastal Carolina vs. First Bankers Trustshares | Coastal Carolina vs. Greenville Federal Financial | Coastal Carolina vs. First Ottawa Bancshares | Coastal Carolina vs. Citizens Bancorp Investment |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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