Correlation Between Walker Dunlop and China Life
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and China Life 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 China Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and China Life Insurance, you can compare the effects of market volatilities on Walker Dunlop and China Life 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 China Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and China Life.
Diversification Opportunities for Walker Dunlop and China Life
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walker and China is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and China Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Life Insurance 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 China Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Life Insurance has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and China Life go up and down completely randomly.
Pair Corralation between Walker Dunlop and China Life
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.74 times less return on investment than China Life. But when comparing it to its historical volatility, Walker Dunlop is 1.83 times less risky than China Life. It trades about 0.04 of its potential returns per unit of risk. China Life Insurance is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 143.00 in China Life Insurance on August 24, 2024 and sell it today you would earn a total of 53.00 from holding China Life Insurance or generate 37.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.98% |
| Values | Daily Returns |
Walker Dunlop vs. China Life Insurance
Performance |
| Timeline |
| Walker Dunlop |
| China Life Insurance |
Walker Dunlop and China Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and China Life
The main advantage of trading using opposite Walker Dunlop and China Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, China Life 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 China Life will offset losses from the drop in China Life's long position.| Walker Dunlop vs. Encore Capital Group | Walker Dunlop vs. Federal Home Loan | Walker Dunlop vs. CNFinance Holdings | Walker Dunlop vs. Greystone Housing Impact |
| China Life vs. CNO Financial Group | China Life vs. Ping An Insurance | China Life vs. Lincoln National | China Life vs. AIA Group Ltd |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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