Correlation Between Walker Dunlop and CMC Metals
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and CMC Metals 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 CMC Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and CMC Metals, you can compare the effects of market volatilities on Walker Dunlop and CMC Metals 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 CMC Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and CMC Metals.
Diversification Opportunities for Walker Dunlop and CMC Metals
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Walker and CMC is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and CMC Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CMC Metals 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 CMC Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CMC Metals has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and CMC Metals go up and down completely randomly.
Pair Corralation between Walker Dunlop and CMC Metals
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 14.91 times less return on investment than CMC Metals. But when comparing it to its historical volatility, Walker Dunlop is 11.17 times less risky than CMC Metals. It trades about 0.06 of its potential returns per unit of risk. CMC Metals is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 10.00 in CMC Metals on September 2, 2024 and sell it today you would lose (8.58) from holding CMC Metals or give up 85.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. CMC Metals
Performance |
| Timeline |
| Walker Dunlop |
| CMC Metals |
Walker Dunlop and CMC Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and CMC Metals
The main advantage of trading using opposite Walker Dunlop and CMC Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, CMC Metals 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 CMC Metals will offset losses from the drop in CMC Metals' 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 |
| CMC Metals vs. Bravo Mining Corp | CMC Metals vs. Southern Silver Exploration | CMC Metals vs. AbraSilver Resource Corp | CMC Metals vs. Gatos Silver |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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