Correlation Between Walker Dunlop and Lucara Diamond
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Lucara Diamond 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 Lucara Diamond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Lucara Diamond Corp, you can compare the effects of market volatilities on Walker Dunlop and Lucara Diamond 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 Lucara Diamond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Lucara Diamond.
Diversification Opportunities for Walker Dunlop and Lucara Diamond
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Walker and Lucara is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Lucara Diamond Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucara Diamond Corp 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 Lucara Diamond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lucara Diamond Corp has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Lucara Diamond go up and down completely randomly.
Pair Corralation between Walker Dunlop and Lucara Diamond
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.35 times more return on investment than Lucara Diamond. However, Walker Dunlop is 2.85 times less risky than Lucara Diamond. It trades about 0.11 of its potential returns per unit of risk. Lucara Diamond Corp is currently generating about -0.04 per unit of risk. If you would invest 10,674 in Walker Dunlop on September 3, 2024 and sell it today you would earn a total of 344.00 from holding Walker Dunlop or generate 3.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. Lucara Diamond Corp
Performance |
| Timeline |
| Walker Dunlop |
| Lucara Diamond Corp |
Walker Dunlop and Lucara Diamond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Lucara Diamond
The main advantage of trading using opposite Walker Dunlop and Lucara Diamond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Lucara Diamond 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 Lucara Diamond will offset losses from the drop in Lucara Diamond'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 |
| Lucara Diamond vs. Advantage Solutions | Lucara Diamond vs. Atlas Corp | Lucara Diamond vs. PureCycle Technologies | Lucara Diamond vs. WM Technology |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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