Correlation Between Walker Dunlop and Metro
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Metro 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 Metro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Metro Inc, you can compare the effects of market volatilities on Walker Dunlop and Metro 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 Metro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Metro.
Diversification Opportunities for Walker Dunlop and Metro
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Walker and Metro is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Metro Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Inc 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 Metro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Inc has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Metro go up and down completely randomly.
Pair Corralation between Walker Dunlop and Metro
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 2.14 times more return on investment than Metro. However, Walker Dunlop is 2.14 times more volatile than Metro Inc. It trades about 0.06 of its potential returns per unit of risk. Metro Inc is currently generating about 0.08 per unit of risk. If you would invest 7,549 in Walker Dunlop on August 31, 2024 and sell it today you would earn a total of 3,469 from holding Walker Dunlop or generate 45.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Walker Dunlop vs. Metro Inc
Performance |
| Timeline |
| Walker Dunlop |
| Metro Inc |
Walker Dunlop and Metro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Metro
The main advantage of trading using opposite Walker Dunlop and Metro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Metro 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 Metro will offset losses from the drop in Metro'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 |
| Metro vs. Maple Leaf Foods | Metro vs. Saputo Inc | Metro vs. Forstrong Global Income | Metro vs. iShares Canadian HYBrid |
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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