Correlation Between Walker Dunlop and Direxion Shares
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Direxion Shares 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 Direxion Shares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Direxion Shares ETF, you can compare the effects of market volatilities on Walker Dunlop and Direxion Shares 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 Direxion Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Direxion Shares.
Diversification Opportunities for Walker Dunlop and Direxion Shares
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Walker and Direxion is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Direxion Shares ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion Shares ETF 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 Direxion Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direxion Shares ETF has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Direxion Shares go up and down completely randomly.
Pair Corralation between Walker Dunlop and Direxion Shares
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.63 times more return on investment than Direxion Shares. However, Walker Dunlop is 1.59 times less risky than Direxion Shares. It trades about 0.04 of its potential returns per unit of risk. Direxion Shares ETF is currently generating about 0.0 per unit of risk. If you would invest 7,967 in Walker Dunlop on September 3, 2024 and sell it today you would earn a total of 3,051 from holding Walker Dunlop or generate 38.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Walker Dunlop vs. Direxion Shares ETF
Performance |
| Timeline |
| Walker Dunlop |
| Direxion Shares ETF |
Walker Dunlop and Direxion Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Direxion Shares
The main advantage of trading using opposite Walker Dunlop and Direxion Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Direxion Shares 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 Direxion Shares will offset losses from the drop in Direxion Shares' 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 |
| Direxion Shares vs. Vanguard Index Funds | Direxion Shares vs. Vanguard Index Funds | Direxion Shares vs. Vanguard STAR Funds | Direxion Shares vs. SPDR SP 500 |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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