Correlation Between Walker Dunlop and Emerald Growth
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Emerald Growth 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 Emerald Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Emerald Growth Fund, you can compare the effects of market volatilities on Walker Dunlop and Emerald Growth 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 Emerald Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Emerald Growth.
Diversification Opportunities for Walker Dunlop and Emerald Growth
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walker and Emerald is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Emerald Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerald Growth 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 Emerald Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerald Growth has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Emerald Growth go up and down completely randomly.
Pair Corralation between Walker Dunlop and Emerald Growth
Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the Emerald Growth. But the stock apears to be less risky and, when comparing its historical volatility, Walker Dunlop is 1.24 times less risky than Emerald Growth. The stock trades about -0.16 of its potential returns per unit of risk. The Emerald Growth Fund is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,445 in Emerald Growth Fund on August 25, 2024 and sell it today you would earn a total of 167.00 from holding Emerald Growth Fund or generate 6.83% 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. Emerald Growth Fund
Performance |
| Timeline |
| Walker Dunlop |
| Emerald Growth |
Walker Dunlop and Emerald Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Emerald Growth
The main advantage of trading using opposite Walker Dunlop and Emerald Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Emerald Growth 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 Emerald Growth will offset losses from the drop in Emerald Growth'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 |
| Emerald Growth vs. Emerald Growth Fund | Emerald Growth vs. Emerald Growth Fund | Emerald Growth vs. Driehaus Micro Cap | Emerald Growth vs. Eventide Gilead Fund |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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