Correlation Between Walker Dunlop and IES Holdings
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and IES Holdings 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 IES Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and IES Holdings, you can compare the effects of market volatilities on Walker Dunlop and IES Holdings 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 IES Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and IES Holdings.
Diversification Opportunities for Walker Dunlop and IES Holdings
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walker and IES is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and IES Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IES Holdings 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 IES Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IES Holdings has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and IES Holdings go up and down completely randomly.
Pair Corralation between Walker Dunlop and IES Holdings
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.9 times more return on investment than IES Holdings. However, Walker Dunlop is 1.11 times less risky than IES Holdings. It trades about 0.04 of its potential returns per unit of risk. IES Holdings is currently generating about 0.01 per unit of risk. If you would invest 7,861 in Walker Dunlop on August 29, 2024 and sell it today you would earn a total of 3,195 from holding Walker Dunlop or generate 40.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 77.78% |
| Values | Daily Returns |
Walker Dunlop vs. IES Holdings
Performance |
| Timeline |
| Walker Dunlop |
| IES Holdings |
Walker Dunlop and IES Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and IES Holdings
The main advantage of trading using opposite Walker Dunlop and IES Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, IES Holdings 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 IES Holdings will offset losses from the drop in IES Holdings' 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 |
| IES Holdings vs. Israel Canada | IES Holdings vs. Delek Group | IES Holdings vs. Shikun Binui | IES Holdings vs. Israel Discount Bank |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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