Correlation Between Walker Dunlop and Electromed
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Electromed 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 Electromed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Electromed, you can compare the effects of market volatilities on Walker Dunlop and Electromed 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 Electromed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Electromed.
Diversification Opportunities for Walker Dunlop and Electromed
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Walker and Electromed is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Electromed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electromed 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 Electromed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electromed has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Electromed go up and down completely randomly.
Pair Corralation between Walker Dunlop and Electromed
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 2.42 times less return on investment than Electromed. But when comparing it to its historical volatility, Walker Dunlop is 1.53 times less risky than Electromed. It trades about 0.06 of its potential returns per unit of risk. Electromed is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,224 in Electromed on August 31, 2024 and sell it today you would earn a total of 1,854 from holding Electromed or generate 151.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. Electromed
Performance |
| Timeline |
| Walker Dunlop |
| Electromed |
Walker Dunlop and Electromed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Electromed
The main advantage of trading using opposite Walker Dunlop and Electromed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Electromed 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 Electromed will offset losses from the drop in Electromed'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 |
| Electromed vs. Abbott Laboratories | Electromed vs. Medtronic PLC | Electromed vs. Edwards Lifesciences Corp | Electromed vs. ZimVie 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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