Correlation Between Walker Dunlop and Live Oak
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Live Oak 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 Live Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Live Oak Bancshares, you can compare the effects of market volatilities on Walker Dunlop and Live Oak 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 Live Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Live Oak.
Diversification Opportunities for Walker Dunlop and Live Oak
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Walker and Live is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Live Oak Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Oak Bancshares 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 Live Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Oak Bancshares has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Live Oak go up and down completely randomly.
Pair Corralation between Walker Dunlop and Live Oak
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.64 times more return on investment than Live Oak. However, Walker Dunlop is 1.55 times less risky than Live Oak. It trades about 0.01 of its potential returns per unit of risk. Live Oak Bancshares is currently generating about 0.0 per unit of risk. If you would invest 9,469 in Walker Dunlop on November 9, 2024 and sell it today you would earn a total of 104.00 from holding Walker Dunlop or generate 1.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. Live Oak Bancshares
Performance |
| Timeline |
| Walker Dunlop |
| Live Oak Bancshares |
Walker Dunlop and Live Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Live Oak
The main advantage of trading using opposite Walker Dunlop and Live Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Live Oak 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 Live Oak will offset losses from the drop in Live Oak'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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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