Correlation Between Walker Dunlop and LATAM Airlines
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and LATAM Airlines 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 LATAM Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and LATAM Airlines Group, you can compare the effects of market volatilities on Walker Dunlop and LATAM Airlines 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 LATAM Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and LATAM Airlines.
Diversification Opportunities for Walker Dunlop and LATAM Airlines
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Walker and LATAM is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and LATAM Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LATAM Airlines Group 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 LATAM Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LATAM Airlines Group has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and LATAM Airlines go up and down completely randomly.
Pair Corralation between Walker Dunlop and LATAM Airlines
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.62 times less return on investment than LATAM Airlines. In addition to that, Walker Dunlop is 1.13 times more volatile than LATAM Airlines Group. It trades about 0.06 of its total potential returns per unit of risk. LATAM Airlines Group is currently generating about 0.11 per unit of volatility. If you would invest 697.00 in LATAM Airlines Group on August 31, 2024 and sell it today you would earn a total of 653.00 from holding LATAM Airlines Group or generate 93.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.59% |
| Values | Daily Returns |
Walker Dunlop vs. LATAM Airlines Group
Performance |
| Timeline |
| Walker Dunlop |
| LATAM Airlines Group |
Walker Dunlop and LATAM Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and LATAM Airlines
The main advantage of trading using opposite Walker Dunlop and LATAM Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, LATAM Airlines 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 LATAM Airlines will offset losses from the drop in LATAM Airlines' 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 |
| LATAM Airlines vs. Falabella | LATAM Airlines vs. Cencosud | LATAM Airlines vs. Sociedad Qumica y | LATAM Airlines vs. Empresas Copec SA |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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