Correlation Between Walker Dunlop and MT Bank
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and MT Bank 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 MT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and MT Bank Corp, you can compare the effects of market volatilities on Walker Dunlop and MT Bank 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 MT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and MT Bank.
Diversification Opportunities for Walker Dunlop and MT Bank
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Walker and MTZ is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and MT Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MT Bank Corp 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 MT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MT Bank Corp has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and MT Bank go up and down completely randomly.
Pair Corralation between Walker Dunlop and MT Bank
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.31 times more return on investment than MT Bank. However, Walker Dunlop is 1.31 times more volatile than MT Bank Corp. It trades about 0.01 of its potential returns per unit of risk. MT Bank Corp is currently generating about -0.17 per unit of risk. If you would invest 8,668 in Walker Dunlop on December 11, 2024 and sell it today you would lose (20.00) from holding Walker Dunlop or give up 0.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Walker Dunlop vs. MT Bank Corp
Performance |
| Timeline |
| Walker Dunlop |
| MT Bank Corp |
Walker Dunlop and MT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and MT Bank
The main advantage of trading using opposite Walker Dunlop and MT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, MT Bank 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 MT Bank will offset losses from the drop in MT Bank'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 |
| MT Bank vs. EIDESVIK OFFSHORE NK | MT Bank vs. ASPEN TECHINC DL | MT Bank vs. WESANA HEALTH HOLD | MT Bank vs. SOLSTAD OFFSHORE NK |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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