Correlation Between Walker Dunlop and TFS FINANCIAL
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and TFS FINANCIAL 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 TFS FINANCIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and TFS FINANCIAL, you can compare the effects of market volatilities on Walker Dunlop and TFS FINANCIAL 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 TFS FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and TFS FINANCIAL.
Diversification Opportunities for Walker Dunlop and TFS FINANCIAL
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Walker and TFS is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and TFS FINANCIAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TFS FINANCIAL 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 TFS FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TFS FINANCIAL has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and TFS FINANCIAL go up and down completely randomly.
Pair Corralation between Walker Dunlop and TFS FINANCIAL
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.13 times less return on investment than TFS FINANCIAL. In addition to that, Walker Dunlop is 1.32 times more volatile than TFS FINANCIAL. It trades about 0.02 of its total potential returns per unit of risk. TFS FINANCIAL is currently generating about 0.03 per unit of volatility. If you would invest 1,067 in TFS FINANCIAL on November 28, 2024 and sell it today you would earn a total of 183.00 from holding TFS FINANCIAL or generate 17.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.6% |
| Values | Daily Returns |
Walker Dunlop vs. TFS FINANCIAL
Performance |
| Timeline |
| Walker Dunlop |
| TFS FINANCIAL |
Walker Dunlop and TFS FINANCIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and TFS FINANCIAL
The main advantage of trading using opposite Walker Dunlop and TFS FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, TFS FINANCIAL 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 TFS FINANCIAL will offset losses from the drop in TFS FINANCIAL'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 |
| TFS FINANCIAL vs. GOLDQUEST MINING | TFS FINANCIAL vs. Summit Hotel Properties | TFS FINANCIAL vs. FIREWEED METALS P | TFS FINANCIAL vs. Choice Hotels International |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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