Correlation Between Walker Dunlop and Torrid Holdings
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Torrid Holdings 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 Torrid Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Torrid Holdings, you can compare the effects of market volatilities on Walker Dunlop and Torrid Holdings 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 Torrid Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Torrid Holdings.
Diversification Opportunities for Walker Dunlop and Torrid Holdings
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Walker and Torrid is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Torrid Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Torrid Holdings 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 Torrid Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Torrid Holdings has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Torrid Holdings go up and down completely randomly.
Pair Corralation between Walker Dunlop and Torrid Holdings
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 12.94 times less return on investment than Torrid Holdings. But when comparing it to its historical volatility, Walker Dunlop is 1.82 times less risky than Torrid Holdings. It trades about 0.04 of its potential returns per unit of risk. Torrid Holdings is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 350.00 in Torrid Holdings on August 28, 2024 and sell it today you would earn a total of 66.00 from holding Torrid Holdings or generate 18.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Walker Dunlop vs. Torrid Holdings
Performance |
Timeline |
Walker Dunlop |
Torrid Holdings |
Walker Dunlop and Torrid Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Walker Dunlop and Torrid Holdings
The main advantage of trading using opposite Walker Dunlop and Torrid Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Torrid Holdings 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 Torrid Holdings will offset losses from the drop in Torrid Holdings' 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 |
Torrid Holdings vs. Cato Corporation | Torrid Holdings vs. Shoe Carnival | Torrid Holdings vs. Genesco | Torrid Holdings vs. Zumiez Inc |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |