Correlation Between Walker Dunlop and EOG Resources
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and EOG Resources 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 EOG Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and EOG Resources, you can compare the effects of market volatilities on Walker Dunlop and EOG Resources 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 EOG Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and EOG Resources.
Diversification Opportunities for Walker Dunlop and EOG Resources
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Walker and EOG is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and EOG Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EOG Resources 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 EOG Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EOG Resources has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and EOG Resources go up and down completely randomly.
Pair Corralation between Walker Dunlop and EOG Resources
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.21 times more return on investment than EOG Resources. However, Walker Dunlop is 1.21 times more volatile than EOG Resources. It trades about 0.05 of its potential returns per unit of risk. EOG Resources is currently generating about 0.06 per unit of risk. If you would invest 8,758 in Walker Dunlop on August 27, 2024 and sell it today you would earn a total of 2,091 from holding Walker Dunlop or generate 23.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.8% |
| Values | Daily Returns |
Walker Dunlop vs. EOG Resources
Performance |
| Timeline |
| Walker Dunlop |
| EOG Resources |
Walker Dunlop and EOG Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and EOG Resources
The main advantage of trading using opposite Walker Dunlop and EOG Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, EOG Resources 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 EOG Resources will offset losses from the drop in EOG Resources' 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 |
| EOG Resources vs. Canadian Natural Resources | EOG Resources vs. Pioneer Natural Resources | EOG Resources vs. Woodside Energy 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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