Correlation Between Walker Dunlop and Dingdong ADR
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Dingdong ADR 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 Dingdong ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Dingdong ADR, you can compare the effects of market volatilities on Walker Dunlop and Dingdong ADR 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 Dingdong ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Dingdong ADR.
Diversification Opportunities for Walker Dunlop and Dingdong ADR
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Walker and Dingdong is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Dingdong ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dingdong ADR 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 Dingdong ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dingdong ADR has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Dingdong ADR go up and down completely randomly.
Pair Corralation between Walker Dunlop and Dingdong ADR
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.13 times less return on investment than Dingdong ADR. But when comparing it to its historical volatility, Walker Dunlop is 2.43 times less risky than Dingdong ADR. It trades about 0.04 of its potential returns per unit of risk. Dingdong ADR is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 497.00 in Dingdong ADR on August 24, 2024 and sell it today you would lose (104.00) from holding Dingdong ADR or give up 20.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. Dingdong ADR
Performance |
| Timeline |
| Walker Dunlop |
| Dingdong ADR |
Walker Dunlop and Dingdong ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Dingdong ADR
The main advantage of trading using opposite Walker Dunlop and Dingdong ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Dingdong ADR 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 Dingdong ADR will offset losses from the drop in Dingdong ADR'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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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