Correlation Between Walker Dunlop and Critical Elements
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Critical Elements 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 Critical Elements into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Critical Elements, you can compare the effects of market volatilities on Walker Dunlop and Critical Elements 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 Critical Elements. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Critical Elements.
Diversification Opportunities for Walker Dunlop and Critical Elements
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walker and Critical is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Critical Elements in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Critical Elements 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 Critical Elements. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Critical Elements has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Critical Elements go up and down completely randomly.
Pair Corralation between Walker Dunlop and Critical Elements
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.42 times more return on investment than Critical Elements. However, Walker Dunlop is 2.4 times less risky than Critical Elements. It trades about 0.05 of its potential returns per unit of risk. Critical Elements is currently generating about -0.42 per unit of risk. If you would invest 10,870 in Walker Dunlop on September 1, 2024 and sell it today you would earn a total of 148.00 from holding Walker Dunlop or generate 1.36% 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. Critical Elements
Performance |
| Timeline |
| Walker Dunlop |
| Critical Elements |
Walker Dunlop and Critical Elements Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Critical Elements
The main advantage of trading using opposite Walker Dunlop and Critical Elements positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Critical Elements 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 Critical Elements will offset losses from the drop in Critical Elements' 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 |
| Critical Elements vs. Argosy Minerals Limited | Critical Elements vs. Aurelia Metals Limited | Critical Elements vs. Artemis Resources | Critical Elements vs. Ascendant Resources |
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 Stocks Directory module to find actively traded stocks across global markets.
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