Correlation Between Walker Dunlop and Flaherty Crumrine
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Flaherty Crumrine 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 Flaherty Crumrine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Flaherty Crumrine Preferred, you can compare the effects of market volatilities on Walker Dunlop and Flaherty Crumrine 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 Flaherty Crumrine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Flaherty Crumrine.
Diversification Opportunities for Walker Dunlop and Flaherty Crumrine
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Walker and Flaherty is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Flaherty Crumrine Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flaherty Crumrine 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 Flaherty Crumrine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flaherty Crumrine has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Flaherty Crumrine go up and down completely randomly.
Pair Corralation between Walker Dunlop and Flaherty Crumrine
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 3.21 times more return on investment than Flaherty Crumrine. However, Walker Dunlop is 3.21 times more volatile than Flaherty Crumrine Preferred. It trades about -0.07 of its potential returns per unit of risk. Flaherty Crumrine Preferred is currently generating about -0.28 per unit of risk. If you would invest 10,983 in Walker Dunlop on August 24, 2024 and sell it today you would lose (302.00) from holding Walker Dunlop or give up 2.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. Flaherty Crumrine Preferred
Performance |
| Timeline |
| Walker Dunlop |
| Flaherty Crumrine |
Walker Dunlop and Flaherty Crumrine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Flaherty Crumrine
The main advantage of trading using opposite Walker Dunlop and Flaherty Crumrine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Flaherty Crumrine 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 Flaherty Crumrine will offset losses from the drop in Flaherty Crumrine's long position.| Walker Dunlop vs. Encore Capital Group | Walker Dunlop vs. Federal Home Loan | Walker Dunlop vs. Federal National Mortgage | Walker Dunlop vs. CNFinance Holdings |
| Flaherty Crumrine vs. Flaherty Crumrine Preferredome | Flaherty Crumrine vs. Flaherty Crumrine Preferred | Flaherty Crumrine vs. Flaherty and Crumrine | Flaherty Crumrine vs. John Hancock Preferred |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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