Correlation Between Walker Dunlop and China Resources
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and China Resources 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 Resources 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 Resources Land, you can compare the effects of market volatilities on Walker Dunlop and China Resources 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 Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and China Resources.
Diversification Opportunities for Walker Dunlop and China Resources
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walker and China is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and China Resources Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Land 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 Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Land has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and China Resources go up and down completely randomly.
Pair Corralation between Walker Dunlop and China Resources
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.77 times more return on investment than China Resources. However, Walker Dunlop is 1.3 times less risky than China Resources. It trades about -0.01 of its potential returns per unit of risk. China Resources Land is currently generating about -0.14 per unit of risk. If you would invest 11,120 in Walker Dunlop on August 28, 2024 and sell it today you would lose (64.00) from holding Walker Dunlop or give up 0.58% 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. China Resources Land
Performance |
| Timeline |
| Walker Dunlop |
| China Resources Land |
Walker Dunlop and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and China Resources
The main advantage of trading using opposite Walker Dunlop and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, China Resources 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 Resources will offset losses from the drop in China Resources' 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 |
| China Resources vs. China Overseas Land | China Resources vs. Longfor Group Holdings | China Resources vs. Sun Hung Kai | China Resources vs. Country Garden Holdings |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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