Correlation Between Walker Dunlop and Federal National
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Federal National 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 Federal National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Federal National Mortgage, you can compare the effects of market volatilities on Walker Dunlop and Federal National 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 Federal National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Federal National.
Diversification Opportunities for Walker Dunlop and Federal National
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Walker and Federal is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Federal National Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal National Mortgage 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 Federal National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal National Mortgage has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Federal National go up and down completely randomly.
Pair Corralation between Walker Dunlop and Federal National
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.83 times more return on investment than Federal National. However, Walker Dunlop is 1.2 times less risky than Federal National. It trades about 0.08 of its potential returns per unit of risk. Federal National Mortgage is currently generating about -0.02 per unit of risk. If you would invest 9,238 in Walker Dunlop on November 8, 2024 and sell it today you would earn a total of 285.00 from holding Walker Dunlop or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Walker Dunlop vs. Federal National Mortgage
Performance |
| Timeline |
| Walker Dunlop |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Federal National Mortgage |
Walker Dunlop and Federal National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Federal National
The main advantage of trading using opposite Walker Dunlop and Federal National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Federal National 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 Federal National will offset losses from the drop in Federal National's long position.| Walker Dunlop vs. Guild Holdings Co | Walker Dunlop vs. Encore Capital Group | Walker Dunlop vs. PennyMac Finl Svcs | Walker Dunlop vs. CNFinance Holdings |
| Federal National vs. Federal Home Loan | Federal National vs. Federal National Mortgage | Federal National vs. Federal National Mortgage | Federal National vs. Federal National Mortgage |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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