Correlation Between Walker Dunlop and Lennar
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Lennar 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 Lennar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Lennar, you can compare the effects of market volatilities on Walker Dunlop and Lennar 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 Lennar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Lennar.
Diversification Opportunities for Walker Dunlop and Lennar
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walker and Lennar is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Lennar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lennar 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 Lennar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lennar has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Lennar go up and down completely randomly.
Pair Corralation between Walker Dunlop and Lennar
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.85 times less return on investment than Lennar. In addition to that, Walker Dunlop is 1.18 times more volatile than Lennar. It trades about 0.04 of its total potential returns per unit of risk. Lennar is currently generating about 0.1 per unit of volatility. If you would invest 49,882 in Lennar on August 26, 2024 and sell it today you would earn a total of 48,429 from holding Lennar or generate 97.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 86.58% |
| Values | Daily Returns |
Walker Dunlop vs. Lennar
Performance |
| Timeline |
| Walker Dunlop |
| Lennar |
Walker Dunlop and Lennar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Lennar
The main advantage of trading using opposite Walker Dunlop and Lennar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Lennar 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 Lennar will offset losses from the drop in Lennar'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 |
| Lennar vs. Electronic Arts | Lennar vs. Take Two Interactive Software | Lennar vs. Brpr Corporate Offices | Lennar vs. Extra Space Storage |
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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