Correlation Between Walker Dunlop and Lafarge North

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Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Lafarge North 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 Lafarge North into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Lafarge North America, you can compare the effects of market volatilities on Walker Dunlop and Lafarge North 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 Lafarge North. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Lafarge North.

Diversification Opportunities for Walker Dunlop and Lafarge North

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Walker and Lafarge is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Lafarge North America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lafarge North America 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 Lafarge North. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lafarge North America has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Lafarge North go up and down completely randomly.

Pair Corralation between Walker Dunlop and Lafarge North

If you would invest  10,115  in Walker Dunlop on September 13, 2024 and sell it today you would earn a total of  627.00  from holding Walker Dunlop or generate 6.2% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Walker Dunlop  vs.  Lafarge North America

 Performance 
       Timeline  
Walker Dunlop 

Risk-Adjusted Performance

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Weak
 
Strong
Insignificant
Over the last 90 days Walker Dunlop has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Walker Dunlop is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
Lafarge North America 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Lafarge North America has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Lafarge North is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Walker Dunlop and Lafarge North Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Walker Dunlop and Lafarge North

The main advantage of trading using opposite Walker Dunlop and Lafarge North positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Lafarge North 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 Lafarge North will offset losses from the drop in Lafarge North's long position.
The idea behind Walker Dunlop and Lafarge North America pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

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