Correlation Between Walker Dunlop and Ethema Health
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Ethema Health 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 Ethema Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Ethema Health Corp, you can compare the effects of market volatilities on Walker Dunlop and Ethema Health 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 Ethema Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Ethema Health.
Diversification Opportunities for Walker Dunlop and Ethema Health
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walker and Ethema is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Ethema Health Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ethema Health Corp 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 Ethema Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ethema Health Corp has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Ethema Health go up and down completely randomly.
Pair Corralation between Walker Dunlop and Ethema Health
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 12.12 times less return on investment than Ethema Health. But when comparing it to its historical volatility, Walker Dunlop is 7.26 times less risky than Ethema Health. It trades about 0.05 of its potential returns per unit of risk. Ethema Health Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 0.04 in Ethema Health Corp on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Ethema Health Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. Ethema Health Corp
Performance |
| Timeline |
| Walker Dunlop |
| Ethema Health Corp |
Walker Dunlop and Ethema Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Ethema Health
The main advantage of trading using opposite Walker Dunlop and Ethema Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Ethema Health 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 Ethema Health will offset losses from the drop in Ethema Health'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 |
| Ethema Health vs. PayPal Holdings | Ethema Health vs. Nasdaq Inc | Ethema Health vs. Choice Hotels International | Ethema Health vs. Microsoft |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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