Correlation Between Walker Dunlop and Marks
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Marks 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 Marks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Marks and Spencer, you can compare the effects of market volatilities on Walker Dunlop and Marks 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 Marks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Marks.
Diversification Opportunities for Walker Dunlop and Marks
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Walker and Marks is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Marks and Spencer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marks and Spencer 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 Marks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marks and Spencer has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Marks go up and down completely randomly.
Pair Corralation between Walker Dunlop and Marks
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 2.85 times less return on investment than Marks. But when comparing it to its historical volatility, Walker Dunlop is 1.17 times less risky than Marks. It trades about 0.04 of its potential returns per unit of risk. Marks and Spencer is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 134.00 in Marks and Spencer on September 5, 2024 and sell it today you would earn a total of 335.00 from holding Marks and Spencer or generate 250.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.02% |
| Values | Daily Returns |
Walker Dunlop vs. Marks and Spencer
Performance |
| Timeline |
| Walker Dunlop |
| Marks and Spencer |
Walker Dunlop and Marks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Marks
The main advantage of trading using opposite Walker Dunlop and Marks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Marks 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 Marks will offset losses from the drop in Marks' long position.| Walker Dunlop vs. Mr Cooper Group | Walker Dunlop vs. Security National Financial | Walker Dunlop vs. Encore Capital Group | Walker Dunlop vs. Timbercreek Financial Corp |
| Marks vs. CarsalesCom | Marks vs. MAVEN WIRELESS SWEDEN | Marks vs. Entravision Communications | Marks vs. TRADEGATE |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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