Correlation Between Walker Dunlop and Legrand SA
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Legrand SA 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 Legrand SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Legrand SA ADR, you can compare the effects of market volatilities on Walker Dunlop and Legrand SA 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 Legrand SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Legrand SA.
Diversification Opportunities for Walker Dunlop and Legrand SA
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walker and Legrand is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Legrand SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legrand SA ADR 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 Legrand SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legrand SA ADR has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Legrand SA go up and down completely randomly.
Pair Corralation between Walker Dunlop and Legrand SA
Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the Legrand SA. In addition to that, Walker Dunlop is 1.61 times more volatile than Legrand SA ADR. It trades about -0.07 of its total potential returns per unit of risk. Legrand SA ADR is currently generating about 0.33 per unit of volatility. If you would invest 1,968 in Legrand SA ADR on October 26, 2024 and sell it today you would earn a total of 179.00 from holding Legrand SA ADR or generate 9.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. Legrand SA ADR
Performance |
| Timeline |
| Walker Dunlop |
| Legrand SA ADR |
Walker Dunlop and Legrand SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Legrand SA
The main advantage of trading using opposite Walker Dunlop and Legrand SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Legrand SA 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 Legrand SA will offset losses from the drop in Legrand SA'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 |
| Legrand SA vs. AFC Energy plc | Legrand SA vs. Loop Energy | Legrand SA vs. Sunrise New Energy | Legrand SA vs. Signify NV |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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