Correlation Between Walker Dunlop and Caledonia Mining
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Caledonia Mining 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 Caledonia Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Caledonia Mining, you can compare the effects of market volatilities on Walker Dunlop and Caledonia Mining 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 Caledonia Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Caledonia Mining.
Diversification Opportunities for Walker Dunlop and Caledonia Mining
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walker and Caledonia is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Caledonia Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caledonia Mining 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 Caledonia Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caledonia Mining has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Caledonia Mining go up and down completely randomly.
Pair Corralation between Walker Dunlop and Caledonia Mining
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.72 times more return on investment than Caledonia Mining. However, Walker Dunlop is 1.39 times less risky than Caledonia Mining. It trades about 0.02 of its potential returns per unit of risk. Caledonia Mining is currently generating about 0.0 per unit of risk. If you would invest 8,684 in Walker Dunlop on November 8, 2024 and sell it today you would earn a total of 889.00 from holding Walker Dunlop or generate 10.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. Caledonia Mining
Performance |
| Timeline |
| Walker Dunlop |
| Caledonia Mining |
Walker Dunlop and Caledonia Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Caledonia Mining
The main advantage of trading using opposite Walker Dunlop and Caledonia Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Caledonia Mining 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 Caledonia Mining will offset losses from the drop in Caledonia Mining's long position.| Walker Dunlop vs. Guild Holdings Co | Walker Dunlop vs. Encore Capital Group | Walker Dunlop vs. PennyMac Finl Svcs | Walker Dunlop vs. CNFinance Holdings |
| Caledonia Mining vs. DRDGOLD Limited ADR | Caledonia Mining vs. Galiano Gold | Caledonia Mining vs. Mastech Holdings | Caledonia Mining vs. EMX Royalty Corp |
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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