Correlation Between Walker Dunlop and First Bancorp
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and First Bancorp 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 First Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and First Bancorp, you can compare the effects of market volatilities on Walker Dunlop and First Bancorp 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 First Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and First Bancorp.
Diversification Opportunities for Walker Dunlop and First Bancorp
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Walker and First is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and First Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Bancorp 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 First Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Bancorp has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and First Bancorp go up and down completely randomly.
Pair Corralation between Walker Dunlop and First Bancorp
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.22 times less return on investment than First Bancorp. In addition to that, Walker Dunlop is 1.02 times more volatile than First Bancorp. It trades about 0.07 of its total potential returns per unit of risk. First Bancorp is currently generating about 0.09 per unit of volatility. If you would invest 1,448 in First Bancorp on August 24, 2024 and sell it today you would earn a total of 654.00 from holding First Bancorp or generate 45.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. First Bancorp
Performance |
| Timeline |
| Walker Dunlop |
| First Bancorp |
Walker Dunlop and First Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and First Bancorp
The main advantage of trading using opposite Walker Dunlop and First Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, First Bancorp 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 First Bancorp will offset losses from the drop in First Bancorp's long position.| Walker Dunlop vs. Encore Capital Group | Walker Dunlop vs. Federal Home Loan | Walker Dunlop vs. Federal National Mortgage | Walker Dunlop vs. CNFinance Holdings |
| First Bancorp vs. Franklin Financial Services | First Bancorp vs. National Bank Holdings | First Bancorp vs. Bankwell Financial Group | First Bancorp vs. Finward Bancorp |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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