Correlation Between Walker Dunlop and HCM Defender
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and HCM Defender 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 HCM Defender into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and HCM Defender 100, you can compare the effects of market volatilities on Walker Dunlop and HCM Defender 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 HCM Defender. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and HCM Defender.
Diversification Opportunities for Walker Dunlop and HCM Defender
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Walker and HCM is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and HCM Defender 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCM Defender 100 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 HCM Defender. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HCM Defender 100 has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and HCM Defender go up and down completely randomly.
Pair Corralation between Walker Dunlop and HCM Defender
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.34 times less return on investment than HCM Defender. In addition to that, Walker Dunlop is 1.69 times more volatile than HCM Defender 100. It trades about 0.05 of its total potential returns per unit of risk. HCM Defender 100 is currently generating about 0.1 per unit of volatility. If you would invest 3,525 in HCM Defender 100 on August 30, 2024 and sell it today you would earn a total of 3,026 from holding HCM Defender 100 or generate 85.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Walker Dunlop vs. HCM Defender 100
Performance |
Timeline |
Walker Dunlop |
HCM Defender 100 |
Walker Dunlop and HCM Defender Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Walker Dunlop and HCM Defender
The main advantage of trading using opposite Walker Dunlop and HCM Defender positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, HCM Defender 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 HCM Defender will offset losses from the drop in HCM Defender'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 |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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