Correlation Between Walker Dunlop and Kasten
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Kasten 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 Kasten into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Kasten Inc, you can compare the effects of market volatilities on Walker Dunlop and Kasten 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 Kasten. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Kasten.
Diversification Opportunities for Walker Dunlop and Kasten
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Walker and Kasten is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Kasten Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kasten Inc 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 Kasten. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kasten Inc has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Kasten go up and down completely randomly.
Pair Corralation between Walker Dunlop and Kasten
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.07 times less return on investment than Kasten. But when comparing it to its historical volatility, Walker Dunlop is 7.8 times less risky than Kasten. It trades about 0.08 of its potential returns per unit of risk. Kasten Inc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1.75 in Kasten Inc on September 1, 2024 and sell it today you would lose (1.15) from holding Kasten Inc or give up 65.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Walker Dunlop vs. Kasten Inc
Performance |
| Timeline |
| Walker Dunlop |
| Kasten Inc |
Walker Dunlop and Kasten Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Kasten
The main advantage of trading using opposite Walker Dunlop and Kasten positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Kasten 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 Kasten will offset losses from the drop in Kasten'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 |
| Kasten vs. Interups | Kasten vs. Church Crawford | Kasten vs. Active Health Foods | Kasten vs. Gold Ent 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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