Correlation Between Walker Dunlop and Sally Beauty
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and Sally Beauty 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 Sally Beauty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and Sally Beauty Holdings, you can compare the effects of market volatilities on Walker Dunlop and Sally Beauty 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 Sally Beauty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and Sally Beauty.
Diversification Opportunities for Walker Dunlop and Sally Beauty
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Walker and Sally is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and Sally Beauty Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sally Beauty Holdings 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 Sally Beauty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sally Beauty Holdings has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and Sally Beauty go up and down completely randomly.
Pair Corralation between Walker Dunlop and Sally Beauty
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 1.25 times less return on investment than Sally Beauty. But when comparing it to its historical volatility, Walker Dunlop is 1.59 times less risky than Sally Beauty. It trades about 0.07 of its potential returns per unit of risk. Sally Beauty Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 967.00 in Sally Beauty Holdings on August 26, 2024 and sell it today you would earn a total of 330.00 from holding Sally Beauty Holdings or generate 34.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walker Dunlop vs. Sally Beauty Holdings
Performance |
| Timeline |
| Walker Dunlop |
| Sally Beauty Holdings |
Walker Dunlop and Sally Beauty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and Sally Beauty
The main advantage of trading using opposite Walker Dunlop and Sally Beauty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, Sally Beauty 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 Sally Beauty will offset losses from the drop in Sally Beauty'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 |
| Sally Beauty vs. Oriental Culture Holding | Sally Beauty vs. Hour Loop | Sally Beauty vs. Qurate Retail Series | Sally Beauty vs. Emerge Commerce |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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