Correlation Between Walker Dunlop and Consol Energy
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Consol Energy 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 Consol Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Consol Energy, you can compare the effects of market volatilities on Walker Dunlop and Consol Energy 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 Consol Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Consol Energy.
Diversification Opportunities for Walker Dunlop and Consol Energy
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Walker and Consol is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Consol Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consol Energy 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 Consol Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consol Energy has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Consol Energy go up and down completely randomly.
Pair Corralation between Walker Dunlop and Consol Energy
Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the Consol Energy. But the stock apears to be less risky and, when comparing its historical volatility, Walker Dunlop is 1.93 times less risky than Consol Energy. The stock trades about 0.0 of its potential returns per unit of risk. The Consol Energy is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 10,944 in Consol Energy on August 31, 2024 and sell it today you would earn a total of 2,195 from holding Consol Energy or generate 20.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. Consol Energy
Performance |
| Timeline |
| Walker Dunlop |
| Consol Energy |
Walker Dunlop and Consol Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Consol Energy
The main advantage of trading using opposite Walker Dunlop and Consol Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Consol Energy 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 Consol Energy will offset losses from the drop in Consol Energy'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 |
| Consol Energy vs. Alliance Resource Partners | Consol Energy vs. Natural Resource Partners | Consol Energy vs. Hallador Energy | Consol Energy vs. NACCO Industries |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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