Correlation Between Walker Dunlop and JD
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and JD 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 JD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and JD Inc Adr, you can compare the effects of market volatilities on Walker Dunlop and JD 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 JD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and JD.
Diversification Opportunities for Walker Dunlop and JD
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Walker and JD is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and JD Inc Adr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD Inc Adr 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 JD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD Inc Adr has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and JD go up and down completely randomly.
Pair Corralation between Walker Dunlop and JD
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.23 times less return on investment than JD. But when comparing it to its historical volatility, Walker Dunlop is 1.72 times less risky than JD. It trades about 0.07 of its potential returns per unit of risk. JD Inc Adr is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,670 in JD Inc Adr on August 25, 2024 and sell it today you would earn a total of 798.00 from holding JD Inc Adr or generate 29.89% 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. JD Inc Adr
Performance |
| Timeline |
| Walker Dunlop |
| JD Inc Adr |
Walker Dunlop and JD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and JD
The main advantage of trading using opposite Walker Dunlop and JD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, JD 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 JD will offset losses from the drop in JD'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 CEOs Directory module to screen CEOs from public companies around the world.
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