Correlation Between Walker Dunlop and Knafaim
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Knafaim 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 Knafaim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Knafaim, you can compare the effects of market volatilities on Walker Dunlop and Knafaim 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 Knafaim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Knafaim.
Diversification Opportunities for Walker Dunlop and Knafaim
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Walker and Knafaim is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Knafaim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knafaim 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 Knafaim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knafaim has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Knafaim go up and down completely randomly.
Pair Corralation between Walker Dunlop and Knafaim
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 13.83 times less return on investment than Knafaim. But when comparing it to its historical volatility, Walker Dunlop is 1.31 times less risky than Knafaim. It trades about 0.01 of its potential returns per unit of risk. Knafaim is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 88,656 in Knafaim on August 25, 2024 and sell it today you would earn a total of 43,844 from holding Knafaim or generate 49.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 75.55% |
| Values | Daily Returns |
Walker Dunlop vs. Knafaim
Performance |
| Timeline |
| Walker Dunlop |
| Knafaim |
Walker Dunlop and Knafaim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Knafaim
The main advantage of trading using opposite Walker Dunlop and Knafaim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Knafaim 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 Knafaim will offset losses from the drop in Knafaim'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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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