Correlation Between Walker Dunlop and Coface SA
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Coface SA 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 Coface SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Coface SA, you can compare the effects of market volatilities on Walker Dunlop and Coface SA 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 Coface SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Coface SA.
Diversification Opportunities for Walker Dunlop and Coface SA
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walker and Coface is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Coface SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coface SA 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 Coface SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coface SA has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Coface SA go up and down completely randomly.
Pair Corralation between Walker Dunlop and Coface SA
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.23 times more return on investment than Coface SA. However, Walker Dunlop is 1.23 times more volatile than Coface SA. It trades about -0.01 of its potential returns per unit of risk. Coface SA is currently generating about -0.04 per unit of risk. If you would invest 10,916 in Walker Dunlop on August 24, 2024 and sell it today you would lose (67.00) from holding Walker Dunlop or give up 0.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. Coface SA
Performance |
| Timeline |
| Walker Dunlop |
| Coface SA |
Walker Dunlop and Coface SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Coface SA
The main advantage of trading using opposite Walker Dunlop and Coface SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Coface SA 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 Coface SA will offset losses from the drop in Coface SA'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 |
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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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