Correlation Between Walker Dunlop and New Germany
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and New Germany 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 New Germany into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and New Germany Closed, you can compare the effects of market volatilities on Walker Dunlop and New Germany 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 New Germany. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and New Germany.
Diversification Opportunities for Walker Dunlop and New Germany
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walker and New is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and New Germany Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Germany Closed 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 New Germany. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Germany Closed has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and New Germany go up and down completely randomly.
Pair Corralation between Walker Dunlop and New Germany
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 2.21 times more return on investment than New Germany. However, Walker Dunlop is 2.21 times more volatile than New Germany Closed. It trades about 0.08 of its potential returns per unit of risk. New Germany Closed is currently generating about -0.02 per unit of risk. If you would invest 5,977 in Walker Dunlop on August 31, 2024 and sell it today you would earn a total of 5,105 from holding Walker Dunlop or generate 85.41% 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. New Germany Closed
Performance |
| Timeline |
| Walker Dunlop |
| New Germany Closed |
Walker Dunlop and New Germany Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and New Germany
The main advantage of trading using opposite Walker Dunlop and New Germany positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, New Germany 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 New Germany will offset losses from the drop in New Germany'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 |
| New Germany vs. MFS Investment Grade | New Germany vs. Eaton Vance Municipal | New Germany vs. DTF Tax Free | New Germany vs. HUMANA 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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