Correlation Between Walker Dunlop and Paragon 28
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Paragon 28 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 Paragon 28 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Paragon 28, you can compare the effects of market volatilities on Walker Dunlop and Paragon 28 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 Paragon 28. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Paragon 28.
Diversification Opportunities for Walker Dunlop and Paragon 28
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walker and Paragon is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Paragon 28 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paragon 28 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 Paragon 28. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paragon 28 has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Paragon 28 go up and down completely randomly.
Pair Corralation between Walker Dunlop and Paragon 28
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.45 times more return on investment than Paragon 28. However, Walker Dunlop is 2.23 times less risky than Paragon 28. It trades about 0.06 of its potential returns per unit of risk. Paragon 28 is currently generating about -0.01 per unit of risk. If you would invest 7,549 in Walker Dunlop on August 31, 2024 and sell it today you would earn a total of 3,469 from holding Walker Dunlop or generate 45.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. Paragon 28
Performance |
| Timeline |
| Walker Dunlop |
| Paragon 28 |
Walker Dunlop and Paragon 28 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Paragon 28
The main advantage of trading using opposite Walker Dunlop and Paragon 28 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Paragon 28 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 Paragon 28 will offset losses from the drop in Paragon 28'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 |
| Paragon 28 vs. Abbott Laboratories | Paragon 28 vs. Medtronic PLC | Paragon 28 vs. Edwards Lifesciences Corp | Paragon 28 vs. ZimVie Inc |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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