Correlation Between Walker Dunlop and E Mini
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and E Mini 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 E Mini into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and E Mini SP 500, you can compare the effects of market volatilities on Walker Dunlop and E Mini 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 E Mini. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and E Mini.
Diversification Opportunities for Walker Dunlop and E Mini
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walker and ESUSD is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and E Mini SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E Mini SP 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 E Mini. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E Mini SP has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and E Mini go up and down completely randomly.
Pair Corralation between Walker Dunlop and E Mini
Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the E Mini. In addition to that, Walker Dunlop is 1.84 times more volatile than E Mini SP 500. It trades about 0.0 of its total potential returns per unit of risk. E Mini SP 500 is currently generating about 0.14 per unit of volatility. If you would invest 586,150 in E Mini SP 500 on August 29, 2024 and sell it today you would earn a total of 15,350 from holding E Mini SP 500 or generate 2.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. E Mini SP 500
Performance |
| Timeline |
| Walker Dunlop |
| E Mini SP |
Walker Dunlop and E Mini Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and E Mini
The main advantage of trading using opposite Walker Dunlop and E Mini positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, E Mini 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 E Mini will offset losses from the drop in E Mini'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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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