Correlation Between Walker Dunlop and LHA Market
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and LHA Market 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 LHA Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and LHA Market State, you can compare the effects of market volatilities on Walker Dunlop and LHA Market 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 LHA Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and LHA Market.
Diversification Opportunities for Walker Dunlop and LHA Market
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Walker and LHA is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and LHA Market State in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LHA Market State 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 LHA Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LHA Market State has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and LHA Market go up and down completely randomly.
Pair Corralation between Walker Dunlop and LHA Market
Allowing for the 90-day total investment horizon Walker Dunlop is expected to under-perform the LHA Market. In addition to that, Walker Dunlop is 2.62 times more volatile than LHA Market State. It trades about -0.01 of its total potential returns per unit of risk. LHA Market State is currently generating about 0.05 per unit of volatility. If you would invest 2,204 in LHA Market State on August 29, 2024 and sell it today you would earn a total of 15.00 from holding LHA Market State or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. LHA Market State
Performance |
| Timeline |
| Walker Dunlop |
| LHA Market State |
Walker Dunlop and LHA Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and LHA Market
The main advantage of trading using opposite Walker Dunlop and LHA Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, LHA Market 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 LHA Market will offset losses from the drop in LHA Market'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 |
| LHA Market vs. ETF Series Solutions | LHA Market vs. Northern Lights | LHA Market vs. Innovator Nasdaq 100 Power | LHA Market vs. Tidal ETF Trust |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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