Correlation Between Walker Dunlop and Highlands Bankshares
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Highlands Bankshares 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 Highlands Bankshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Highlands Bankshares, you can compare the effects of market volatilities on Walker Dunlop and Highlands Bankshares 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 Highlands Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Highlands Bankshares.
Diversification Opportunities for Walker Dunlop and Highlands Bankshares
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Walker and Highlands is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Highlands Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highlands Bankshares 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 Highlands Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highlands Bankshares has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Highlands Bankshares go up and down completely randomly.
Pair Corralation between Walker Dunlop and Highlands Bankshares
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.68 times less return on investment than Highlands Bankshares. In addition to that, Walker Dunlop is 1.97 times more volatile than Highlands Bankshares. It trades about 0.11 of its total potential returns per unit of risk. Highlands Bankshares is currently generating about 0.36 per unit of volatility. If you would invest 3,100 in Highlands Bankshares on September 4, 2024 and sell it today you would earn a total of 173.00 from holding Highlands Bankshares or generate 5.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Walker Dunlop vs. Highlands Bankshares
Performance |
| Timeline |
| Walker Dunlop |
| Highlands Bankshares |
Walker Dunlop and Highlands Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Highlands Bankshares
The main advantage of trading using opposite Walker Dunlop and Highlands Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Highlands Bankshares 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 Highlands Bankshares will offset losses from the drop in Highlands Bankshares' 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 |
| Highlands Bankshares vs. First Hawaiian | Highlands Bankshares vs. Central Pacific Financial | Highlands Bankshares vs. Territorial Bancorp | Highlands Bankshares vs. Comerica |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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