Correlation Between Walker Dunlop and First Republic
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and First Republic 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 Republic 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 Republic Bank, you can compare the effects of market volatilities on Walker Dunlop and First Republic 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 Republic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and First Republic.
Diversification Opportunities for Walker Dunlop and First Republic
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walker and First is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and First Republic Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Republic Bank 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 Republic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Republic Bank has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and First Republic go up and down completely randomly.
Pair Corralation between Walker Dunlop and First Republic
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.06 times more return on investment than First Republic. However, Walker Dunlop is 16.57 times less risky than First Republic. It trades about 0.02 of its potential returns per unit of risk. First Republic Bank is currently generating about -0.04 per unit of risk. If you would invest 9,039 in Walker Dunlop on November 5, 2024 and sell it today you would earn a total of 568.00 from holding Walker Dunlop or generate 6.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 22.47% |
| Values | Daily Returns |
Walker Dunlop vs. First Republic Bank
Performance |
| Timeline |
| Walker Dunlop |
| First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Walker Dunlop and First Republic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and First Republic
The main advantage of trading using opposite Walker Dunlop and First Republic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, First Republic 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 Republic will offset losses from the drop in First Republic'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 |
| First Republic vs. Mesa Air Group | First Republic vs. Hurco Companies | First Republic vs. Catalyst Metals Limited | First Republic vs. Broadleaf Co |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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