Correlation Between Walker Dunlop and Federated Hermes
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Federated Hermes 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 Federated Hermes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Federated Hermes ETF, you can compare the effects of market volatilities on Walker Dunlop and Federated Hermes 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 Federated Hermes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Federated Hermes.
Diversification Opportunities for Walker Dunlop and Federated Hermes
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walker and Federated is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Federated Hermes ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Hermes ETF 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 Federated Hermes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Hermes ETF has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Federated Hermes go up and down completely randomly.
Pair Corralation between Walker Dunlop and Federated Hermes
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 5.43 times less return on investment than Federated Hermes. In addition to that, Walker Dunlop is 1.01 times more volatile than Federated Hermes ETF. It trades about 0.05 of its total potential returns per unit of risk. Federated Hermes ETF is currently generating about 0.27 per unit of volatility. If you would invest 2,575 in Federated Hermes ETF on September 1, 2024 and sell it today you would earn a total of 237.00 from holding Federated Hermes ETF or generate 9.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Walker Dunlop vs. Federated Hermes ETF
Performance |
| Timeline |
| Walker Dunlop |
| Federated Hermes ETF |
Walker Dunlop and Federated Hermes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Federated Hermes
The main advantage of trading using opposite Walker Dunlop and Federated Hermes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Federated Hermes 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 Federated Hermes will offset losses from the drop in Federated Hermes' 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 |
| Federated Hermes vs. Schwab Fundamental Large | Federated Hermes vs. Schwab Fundamental International | Federated Hermes vs. Schwab Fundamental International | Federated Hermes vs. Schwab Fundamental Emerging |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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