Correlation Between Walker Dunlop and Digital China
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Digital China 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 Digital China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Digital China Holdings, you can compare the effects of market volatilities on Walker Dunlop and Digital China 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 Digital China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Digital China.
Diversification Opportunities for Walker Dunlop and Digital China
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walker and Digital is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Digital China Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital China 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 Digital China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital China Holdings has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Digital China go up and down completely randomly.
Pair Corralation between Walker Dunlop and Digital China
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.45 times more return on investment than Digital China. However, Walker Dunlop is 2.21 times less risky than Digital China. It trades about 0.05 of its potential returns per unit of risk. Digital China Holdings is currently generating about 0.02 per unit of risk. If you would invest 9,359 in Walker Dunlop on August 27, 2024 and sell it today you would earn a total of 1,490 from holding Walker Dunlop or generate 15.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. Digital China Holdings
Performance |
| Timeline |
| Walker Dunlop |
| Digital China Holdings |
Walker Dunlop and Digital China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Digital China
The main advantage of trading using opposite Walker Dunlop and Digital China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Digital China 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 Digital China will offset losses from the drop in Digital China's 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 |
| Digital China vs. Kyndryl Holdings | Digital China vs. Accenture plc | Digital China vs. BigBearai Holdings | Digital China vs. Xerox Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |