Correlation Between Walker Dunlop and Matthews China
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Matthews China 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 Matthews China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Matthews China Fund, you can compare the effects of market volatilities on Walker Dunlop and Matthews China 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 Matthews China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Matthews China.
Diversification Opportunities for Walker Dunlop and Matthews China
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walker and Matthews is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Matthews China Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews China 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 Matthews China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews China has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Matthews China go up and down completely randomly.
Pair Corralation between Walker Dunlop and Matthews China
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.73 times more return on investment than Matthews China. However, Walker Dunlop is 1.36 times less risky than Matthews China. It trades about -0.01 of its potential returns per unit of risk. Matthews China Fund is currently generating about -0.2 per unit of risk. If you would invest 11,120 in Walker Dunlop on August 29, 2024 and sell it today you would lose (64.00) from holding Walker Dunlop or give up 0.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. Matthews China Fund
Performance |
| Timeline |
| Walker Dunlop |
| Matthews China |
Walker Dunlop and Matthews China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Matthews China
The main advantage of trading using opposite Walker Dunlop and Matthews China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Matthews China 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 Matthews China will offset losses from the drop in Matthews China'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 |
| Matthews China vs. Matthews Pacific Tiger | Matthews China vs. Matthews India Fund | Matthews China vs. Matthews China Dividend | Matthews China vs. Matthews Asia Growth |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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