Correlation Between Walker Dunlop and China BlueChemical
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and China BlueChemical 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 China BlueChemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and China BlueChemical, you can compare the effects of market volatilities on Walker Dunlop and China BlueChemical 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 China BlueChemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and China BlueChemical.
Diversification Opportunities for Walker Dunlop and China BlueChemical
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walker and China is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and China BlueChemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China BlueChemical 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 China BlueChemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China BlueChemical has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and China BlueChemical go up and down completely randomly.
Pair Corralation between Walker Dunlop and China BlueChemical
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.57 times more return on investment than China BlueChemical. However, Walker Dunlop is 1.76 times less risky than China BlueChemical. It trades about 0.06 of its potential returns per unit of risk. China BlueChemical is currently generating about 0.03 per unit of risk. If you would invest 7,518 in Walker Dunlop on August 28, 2024 and sell it today you would earn a total of 3,731 from holding Walker Dunlop or generate 49.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.88% |
| Values | Daily Returns |
Walker Dunlop vs. China BlueChemical
Performance |
| Timeline |
| Walker Dunlop |
| China BlueChemical |
Walker Dunlop and China BlueChemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and China BlueChemical
The main advantage of trading using opposite Walker Dunlop and China BlueChemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, China BlueChemical 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 China BlueChemical will offset losses from the drop in China BlueChemical'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 |
| China BlueChemical vs. CONAGRA FOODS | China BlueChemical vs. Clean Energy Fuels | China BlueChemical vs. Lifeway Foods | China BlueChemical vs. Austevoll Seafood ASA |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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