Correlation Between Walker Dunlop and Hennessy Capital
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Hennessy Capital 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 Hennessy Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Hennessy Capital Investment, you can compare the effects of market volatilities on Walker Dunlop and Hennessy Capital 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 Hennessy Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Hennessy Capital.
Diversification Opportunities for Walker Dunlop and Hennessy Capital
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Walker and Hennessy is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Hennessy Capital Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Capital Inv 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 Hennessy Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hennessy Capital Inv has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Hennessy Capital go up and down completely randomly.
Pair Corralation between Walker Dunlop and Hennessy Capital
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.52 times less return on investment than Hennessy Capital. In addition to that, Walker Dunlop is 5.78 times more volatile than Hennessy Capital Investment. It trades about 0.02 of its total potential returns per unit of risk. Hennessy Capital Investment is currently generating about 0.22 per unit of volatility. If you would invest 1,057 in Hennessy Capital Investment on November 3, 2024 and sell it today you would earn a total of 18.00 from holding Hennessy Capital Investment or generate 1.7% 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. Hennessy Capital Investment
Performance |
| Timeline |
| Walker Dunlop |
| Hennessy Capital Inv |
Walker Dunlop and Hennessy Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Hennessy Capital
The main advantage of trading using opposite Walker Dunlop and Hennessy Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Hennessy Capital 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 Hennessy Capital will offset losses from the drop in Hennessy Capital'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 |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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