Correlation Between Walker Dunlop and Kering SA
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Kering SA 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 Kering SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Kering SA, you can compare the effects of market volatilities on Walker Dunlop and Kering SA 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 Kering SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Kering SA.
Diversification Opportunities for Walker Dunlop and Kering SA
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Walker and Kering is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Kering SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kering SA 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 Kering SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kering SA has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Kering SA go up and down completely randomly.
Pair Corralation between Walker Dunlop and Kering SA
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.07 times more return on investment than Kering SA. However, Walker Dunlop is 1.07 times more volatile than Kering SA. It trades about 0.04 of its potential returns per unit of risk. Kering SA is currently generating about -0.07 per unit of risk. If you would invest 7,669 in Walker Dunlop on September 4, 2024 and sell it today you would earn a total of 3,352 from holding Walker Dunlop or generate 43.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.02% |
| Values | Daily Returns |
Walker Dunlop vs. Kering SA
Performance |
| Timeline |
| Walker Dunlop |
| Kering SA |
Walker Dunlop and Kering SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Kering SA
The main advantage of trading using opposite Walker Dunlop and Kering SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Kering SA 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 Kering SA will offset losses from the drop in Kering SA'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 |
| Kering SA vs. Transportadora de Gas | Kering SA vs. BII Railway Transportation | Kering SA vs. Gold Road Resources | Kering SA vs. QUEEN S ROAD |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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