Correlation Between Walker Dunlop and Compagnie
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Compagnie 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 Compagnie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Compagnie Du Mont Blanc, you can compare the effects of market volatilities on Walker Dunlop and Compagnie 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 Compagnie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Compagnie.
Diversification Opportunities for Walker Dunlop and Compagnie
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Walker and Compagnie is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Compagnie Du Mont Blanc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Du Mont 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 Compagnie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Du Mont has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Compagnie go up and down completely randomly.
Pair Corralation between Walker Dunlop and Compagnie
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.9 times more return on investment than Compagnie. However, Walker Dunlop is 1.11 times less risky than Compagnie. It trades about 0.11 of its potential returns per unit of risk. Compagnie Du Mont Blanc is currently generating about 0.09 per unit of risk. If you would invest 10,674 in Walker Dunlop on September 4, 2024 and sell it today you would earn a total of 347.00 from holding Walker Dunlop or generate 3.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. Compagnie Du Mont Blanc
Performance |
| Timeline |
| Walker Dunlop |
| Compagnie Du Mont |
Walker Dunlop and Compagnie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Compagnie
The main advantage of trading using opposite Walker Dunlop and Compagnie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Compagnie 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 Compagnie will offset losses from the drop in Compagnie'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 |
| Compagnie vs. Trigano SA | Compagnie vs. SA Catana Group | Compagnie vs. Fountaine Pajo | Compagnie vs. Piscines Desjoyaux 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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