Correlation Between Walker Dunlop and John Hancock
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and John Hancock 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 John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and John Hancock Preferred, you can compare the effects of market volatilities on Walker Dunlop and John Hancock 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 John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and John Hancock.
Diversification Opportunities for Walker Dunlop and John Hancock
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Walker and John is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and John Hancock Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Preferred 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 John Hancock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Hancock Preferred has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and John Hancock go up and down completely randomly.
Pair Corralation between Walker Dunlop and John Hancock
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 2.26 times more return on investment than John Hancock. However, Walker Dunlop is 2.26 times more volatile than John Hancock Preferred. It trades about 0.04 of its potential returns per unit of risk. John Hancock Preferred is currently generating about -0.14 per unit of risk. If you would invest 11,120 in Walker Dunlop on August 28, 2024 and sell it today you would earn a total of 129.00 from holding Walker Dunlop or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. John Hancock Preferred
Performance |
| Timeline |
| Walker Dunlop |
| John Hancock Preferred |
Walker Dunlop and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and John Hancock
The main advantage of trading using opposite Walker Dunlop and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, John Hancock 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 John Hancock will offset losses from the drop in John Hancock'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 |
| John Hancock vs. John Hancock Preferred | John Hancock vs. John Hancock Preferred | John Hancock vs. John Hancock Premium | John Hancock vs. John Hancock Tax |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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