Correlation Between Walker Dunlop and MGP Ingredients
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and MGP Ingredients 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 MGP Ingredients into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and MGP Ingredients, you can compare the effects of market volatilities on Walker Dunlop and MGP Ingredients 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 MGP Ingredients. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and MGP Ingredients.
Diversification Opportunities for Walker Dunlop and MGP Ingredients
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Walker and MGP is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and MGP Ingredients in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGP Ingredients 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 MGP Ingredients. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGP Ingredients has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and MGP Ingredients go up and down completely randomly.
Pair Corralation between Walker Dunlop and MGP Ingredients
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.35 times more return on investment than MGP Ingredients. However, Walker Dunlop is 2.83 times less risky than MGP Ingredients. It trades about 0.05 of its potential returns per unit of risk. MGP Ingredients is currently generating about -0.15 per unit of risk. If you would invest 10,870 in Walker Dunlop on September 1, 2024 and sell it today you would earn a total of 148.00 from holding Walker Dunlop or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Walker Dunlop vs. MGP Ingredients
Performance |
| Timeline |
| Walker Dunlop |
| MGP Ingredients |
Walker Dunlop and MGP Ingredients Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and MGP Ingredients
The main advantage of trading using opposite Walker Dunlop and MGP Ingredients positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, MGP Ingredients 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 MGP Ingredients will offset losses from the drop in MGP Ingredients' 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 |
| MGP Ingredients vs. ANDREW PELLER LTD | MGP Ingredients vs. NAKED WINES PLC | MGP Ingredients vs. Superior Plus Corp | MGP Ingredients vs. NMI Holdings |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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