Correlation Between Walker Dunlop and Kingsway Financial
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Kingsway Financial 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 Kingsway Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Kingsway Financial Services, you can compare the effects of market volatilities on Walker Dunlop and Kingsway Financial 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 Kingsway Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Kingsway Financial.
Diversification Opportunities for Walker Dunlop and Kingsway Financial
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Walker and Kingsway is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Kingsway Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingsway Financial 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 Kingsway Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingsway Financial has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Kingsway Financial go up and down completely randomly.
Pair Corralation between Walker Dunlop and Kingsway Financial
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.69 times more return on investment than Kingsway Financial. However, Walker Dunlop is 1.69 times more volatile than Kingsway Financial Services. It trades about 0.0 of its potential returns per unit of risk. Kingsway Financial Services is currently generating about -0.05 per unit of risk. If you would invest 9,721 in Walker Dunlop on November 1, 2024 and sell it today you would lose (62.00) from holding Walker Dunlop or give up 0.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. Kingsway Financial Services
Performance |
| Timeline |
| Walker Dunlop |
| Kingsway Financial |
Walker Dunlop and Kingsway Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Kingsway Financial
The main advantage of trading using opposite Walker Dunlop and Kingsway Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Kingsway Financial 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 Kingsway Financial will offset losses from the drop in Kingsway Financial's long position.| Walker Dunlop vs. Guild Holdings Co | Walker Dunlop vs. Security National Financial | Walker Dunlop vs. Encore Capital Group |
| Kingsway Financial vs. CarGurus | Kingsway Financial vs. KAR Auction Services | Kingsway Financial vs. Driven Brands Holdings | Kingsway Financial vs. Group 1 Automotive |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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