Correlation Between Walker Dunlop and El Mor
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and El Mor 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 El Mor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and El Mor Electric Installation, you can compare the effects of market volatilities on Walker Dunlop and El Mor 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 El Mor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and El Mor.
Diversification Opportunities for Walker Dunlop and El Mor
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walker and ELMR is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and El Mor Electric Installation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on El Mor Electric 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 El Mor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of El Mor Electric has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and El Mor go up and down completely randomly.
Pair Corralation between Walker Dunlop and El Mor
Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the El Mor. But the stock apears to be less risky and, when comparing its historical volatility, Walker Dunlop is 1.51 times less risky than El Mor. The stock trades about -0.01 of its potential returns per unit of risk. The El Mor Electric Installation is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 107,800 in El Mor Electric Installation on August 28, 2024 and sell it today you would earn a total of 10,200 from holding El Mor Electric Installation or generate 9.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 81.82% |
| Values | Daily Returns |
Walker Dunlop vs. El Mor Electric Installation
Performance |
| Timeline |
| Walker Dunlop |
| El Mor Electric |
Walker Dunlop and El Mor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and El Mor
The main advantage of trading using opposite Walker Dunlop and El Mor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, El Mor 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 El Mor will offset losses from the drop in El Mor'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 |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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